I am not sure why you say that. As I understand it, it is a tax cut. Less tax is being taken by the government. Is that not what it is?
Its a completely unfunded tax cut that comes at a time of unprecedented spending - essentially cutting income while you're simultaneously spending more. Its simply not a sound fiscal policy unless it would increase market liquidity and unfreeze the credit markets, but it won't. Moreover, that $300bn cut is only part of Obama's plan - theres going to be a lot more defecit spending to come. Something absolutely has to be done to target the central issue here - declining real estate prices and forclosures - which will cost a few hundred billion, even if mortgage writedown losses are split between lenders/MBS holders and the government. Until that issue is resolved the US economy is going to continue to hemmorage and our financial system will be in danger, regardless of these other "stimulus" programs. Obama's $300bn tax cut will only amount to a $10-20/week increase in net income for most taxpayers for a period of 1-2 years will have minimal effect, if any at all, especially with consumer confidence at a all time low, and with unemployment likely to hit 8-9%, possibly 10% or more this year. Heck, that $10/week would barely cover my lunch for a day (if I even got it, but I probably earn too much)
I'm a fiscal conservative, in the spirit of Goldwater, and generally all for tax cuts, but the economy is in a very bad way right now and the $250bn or so Paulson already spent on recapitalization of the banking system was woefully mishandled, not significant (given the size of some of the recipient's balance sheets...cough...Citi..cough...), and almost completely ineffective in its stated goal of increasng lender liquidity and opening the credit markets. If this mess isn't handled right, the US could easily lose its triple-A credit rating, resulting in increased borrowing costs,
much higher taxes, and deep cuts in government programs across the board - including defense spending. FDIC is also at risk, with far less in its reserves than the amount of insured deposits it covers (FWIW, the failure of IndyMac alone drained almost 15% of FDICs reserves and didn't fully cover insured deposits beyond the $100k limit).