WHATEVER VIRTUES the Reagan tax cut may eventually demonstrate, it certainly isn't doing much for interest rates this week. The rates have lurched sharply upward again, and the reason is clear. People in the money markets fear that the tax cuts commit the United States to a future of large and rising deficits. Analyses of the tax bill are now being passed rapidly around the banks, investment houses and brokerages. Because of President Reagan's repeated declarations about the balancing of the budget, the arithmetic is having a particularly jarring impact.

Last year's deficit was $74 billion if you add in the off-budget spending -- and you'd better add it in because the only difference between spending on and off budget is a thin legal fiction. This year's deficit, again counting the off-budget spending, is going up over $80 billion. Next year's deficit, still including the off-budget accounts, will be $60 billion by the administration's figures. But that would require more than $20 billion in additional budget cuts this fall.

Do you think that Congress is going to cut another $20 billion out of the budget this fall? Remember, the huge and unprecedented budget bill passed last month carried $35 billion in cuts. To hit the president's target, Congress would noiw have to do that same thing all over again on only a slightly lesser scale. This time the cuts would have to be pursued through the appropriations process. Rebellious murmurs are already audible, not from the demoralized House, but from the Republicans who run the Senate Appropriations Committee.

If you carry the projections out a couple of years the gaps get truly dramatic.There is a spreading consensus among financial analysts that, with the enactment of the tax bill, the budget will have to be cut by perhaps $120 billion to bring it into balance in 1984 as the president promises. Is that even possible? It's pretty obvious that not much is going to be taken out of defense spending, Social Security or Medicare. Interest on the federal debt is untouchable. Keep it in mind that those four items alone -- defense, Social Security, Mdicare and interest -- comprise two-thirds of the federal budget. The remainder includes not only welfare for the poor but things like veterans' benefits, farm subsidies and highway construction that find defenders among even the most sternly right of Republicans.

The interest rates are providing an accurate and sensitive index of investors' doubts. They see unexpectedly large deficits colliding repeatedly with the government's policy of tight restraint on credit. Continued high and unstable interest rates threaten, inturn, the rapid economic growth on which the success of the Reagan plan depends.Perhaps there were some incautious congressmen who thought that the struggle to cut the budget had ended triumphantly last month. In fact, it seems to be only at midpoint. The Reagan economic strategy has been a great success in Congress, but it has not yet persuaded its larger audience in the private financial markets.