You're absolutely correct up until the last Bush tax cuts late in his second term. By then the economy was already suffering pretty badly. That cut took the form of a rebate and absolutley nothing happened. No bump in spending, demand, employment or economic activity. After about fifty years of America having a zero or even a negative savings rate, Americans had begun to save. After the surprising non-effect of the cut/rebates, the economists determined that all the money was used to either pay off debt or it went into savings. Thus no economic effect from the tax cut.

Obama tried tax cuts to accelerate the economy as part of his stimulus bill. In his case, they gave the cuts as reduced payroll deductions. So far, there's been far less than the expected effect. The desired effect was to be increased spending, demand, employment and an increase in the creation of new jobs. The savings rate has stayed where it was and the economic effect, particularly the creation of new jobs, has been tepid at best. Early returns are suggesting that the recipients of the extra money in paychecks as the result of reduced payroll witholdings again saved almost all of it, or used it to pay down debt. Since then the U.S. savings rate has trended continually upward to it's current level of about 4%. Economists think this may be a fairly permanent structural change.

The economy is recovering pretty impressively, but job growth is proceeding at a much slower pace. The latest step being attempted is a "tax cut" of sorts--substantially increased unemployment benefits. It remains to be seen what the effect of those payments might be. One thing appears certain--there is little more liquidity left in the Treasury to attempt many more variations of the old methods for giving a spurt to the economy.

The increased savings rate doesn't completely negate the old tried and true method of goosing the economy by cutting taxes, but it certainly dilutes the effect. Basically, the experts believe that in order for it to work as well as it has in the past, any tax cut would have to be much greater, knowing that an initial chunk will go to savings before the consumer begins to spend, with the desired effect of increased economic activity. Of course a larger tax cut, or a tax cut of any kind for that matter, would increase an already skyrocketing deficit.