The president of the research arm of one of Wall Street's largest brokerage houses has warned President Reagan that his proposed defense budget could be the ruin of his entire economic program.

Jack L. Rivkin, president of Paine Webber Mitchell Hutchins Inc., wrote the president that "while I agree with the policy of increased defense expenditures, the level of defense spending proposed in the fiscal year 1983 through 1987 budgets is beyond the capacity of the defense industry to absorb and will ultimately lead to a failure by this administration to achieve a lower inflation rate, renewed capital investment in the private sector and its other economic goals."

"Sometimes, simple truths cannot be ignored," Rivkin wrote in a Feb. 16 letter, in which he said the rapid rise in inflation in the mid- to late-1970s was in large part the result of an excess demand for manufactured goods.

"You are now proposing to substitute the defense industry for basic industry as the engine to fuel inflation in the 1980s," Rivkin wrote the president.

Rivkin concluded with a plea for the president not to ignore "some of the simple economic truths that have been tested time and again." The White House did not have any comment on the Rivkin letter.