AFL-CIO President Lane Kirkland said yesterday that the Reagan administration should stiffen its resolve and force Poland into bankruptcy for suppressing the Solidarity trade union movement.

With most of Solidarity's leaders imprisoned by Poland's martial-law government, Poland's parliament formally outlawed Solidarity Friday. President Reagan responded by denouncing the ban as an "outrage" and announcing steps to suspend Poland's most-favored-nation trading status with the United States.

Speaking on CBS-TV's "Face the Nation," Kirkland called Reagan's action "a relatively weak response to a situation that is of enormous importance." He said he favors stopping credits to Poland and ending rollover of debts in the hands of Western banks. Kirkland said he supports similar action against all Eastern bloc countries in Europe.

"It's the only way that I know of to stop this constant financing of the Eastern bloc, the financing of the buildup of military power and the enforcement of police-state measures," he said. "We're financing it as it stands now. Western banks are pouring credits into Eastern Europe at favorable rates of interest."

The administration has been unwilling to call Polish loans into default because such a step would harm Western bankers. Kirkland, however, said that "if it hurts us now, all the more reason to do it before it hurts us even more, in the future."

"We've put ourselves in the position where, virtually, they own us in terms of the banking connection," he said. "If we're going to sell them the rope with which they're going to hang us, at least we ought to make them pay cash for it."

The U.S. government and American commercial banks hold 14 percent of Poland's total debt to Western creditors of $26 billion. The U.S. Treasury has paid millions of dollars to U.S. banks this year on overdue, U.S.-guaranteed commodities loans to Poland and kept them from being held in default.

White House Chief of Staff James A. Baker III enunciated the administration position on ABC-TV's "This Week with David Brinkley." Baker said that "this is not the time" to drive Poland into default because of "financial consequences in the West."

On the domestic economy, Kirkland warned that unemployment, officially at 10.1 percent for September, is still going up and will continue to do so as long as what he called the administration's "crackbrain theories" of supply-side economics and "monetary radicalism" stay in place.

Reagan "promised us a boom, he brought us a bust," Kirkland charged. "His basic policies have been discredited. . . . We believe specific alternatives must be pursued and they must address this number one overriding problem of putting this country back to work."