The Tax Reduction Act of 1975 was signed into law on March 29 in the midst of the deepest recession in postwar history. Checks were mailed out in the second quarter of 1975. The problem is that most people didn't immediately go out and spend the money, as predicted, and thus there really was very little economic stimulus. In fact, what people tended to do with their windfall was either save it or use it to pay down debt, which is the same thing. He studied consumer behavior and found that consumption didn't automatically go up and down with disposable income.
People tend to spend according to what they believe their permanent income is.
Hence, when they got a temporary income increase, they saved it. Conversely, if they suffered a temporary reduction of income, such as through a job loss, they borrowed to maintain their consumption at the same level. Friedman observed that only when consumers got what they considered a permanent income rise, such as through a job promotion, did they raise their consumption. It follows from this that only permanent tax cuts, which permanently raise disposable income, will have any meaningful impact on consumption. This insight is one of the reasons why Friedman was awarded the Nobel Prize in economics in 1976.