Thus tax cuts do act as an economic stimulus. (Note this is in addition to the added liquidity that is created by the reduction in tax collections).

Aalso, try looking at it from the reverse side:

If the government takes more cash out of the economy via a tax increase what will the effect be on the economy? Cash will be "confscated from the economy directly by the tax increase, and perhaps more importantly, the After-tax return on investment will be decreased forcing business and individuals to decrease their spending on New Plants, Equipment, Research and Development, and Employees.

There is sound rational behind Supply Side Economics. Note: there is also some rational behind Demand Side (Keynsian) Economics as well. Note also, if you have all demand and no supply then you have runaway stagflation: Both literally and figuratively.

Scott Evil