Josh Marshall puts his finger on a key objection to the tax-cuts-as-stimulus approach, noting that we tried that already--last year, in fact--and it didn't work very well. The point he's getting at--that people often save rather than spend temporary tax cuts--is an important one, but I think it can be rebutted in this case.
First, as I understand it, the tax credits Obama wants for lower- and middle-income people would actually be permanent, so we're looking at a different approach. That raises other objections, like cost, but eases the ineffectiveness problem.
Second, even a temporary tax cut would probably be more effective this time around. While it's true that people tend to save a bigger chunk of temporary tax cuts than permanent ones (most people don't feel comfortable spending more unless they're looking at permanently higher income), that's less true the worse off they are. For example, if you've lost your job and can't afford essentials like food and medicine and fuel, you're likely to spend a temporary tax cut on those things rather than sock it away or pay down debts. Unfortunately, given the rising unemployment rate and worsening recession, there are a lot more people in this situation now than there were for most of last year.
--Noam Scheiber