In ''Rostenkowski Plan: A G.O.P. Triumph'' (Op-Ed, March 15), Paul Craig Roberts again rejects sound economic science with his denial that budget deficits affect interest rates -specifically, in denying that balancing the United States budget would reduce interest rates.
In rebuttal to this virtually self-evident thesis, he asks: ''Why do West Germany, with its trade surplus, and Britain, with its budget surplus,'' have higher interest rates than the United States?
The simple answer is that interest-rate determinants are complex. Real inflation in Britain and feared inflation in inflation-phobic West Germany explain their higher interest rates. Since each national economy carries its own economic configurations, the scientific question is this: What happens, other factors assumed equal, to Britain's, or Germany's or America's, interest rates when budget deficits rise?
Economic logic decrees that, in strict accordance with the law of supply and demand, interest rates rise when budget deficits rise. This virtually axiomatic truth can be demonstrated by linear regression analyses of United States interest rates. Such analyses show definite correlations between mortgage rates, corporate bond rates, Treasury bond rates and Federal budget deficits.
Mr. Roberts tacitly recognizes the critical role of the law of supply and demand when he warns that ''raising taxes could put the economy in the tank.'' Why? Because the consequently reduced income could reduce demand for goods and services.
The same law operates in the money markets. When borrowers compete for a budget-reduced pool of lendable dollars, the price of money - i.e., the interest rate - tends to rise. Significantly, this basic economic truth is rejected only by the Reagan Administration's supply-side ideologues.