Mankiw explains his preferred stimulus plan:
I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I would make the two tax changes equal in present value, so while the package results in a short-run budget deficit, there is no long-term budget impact. Call it the create-jobs, save-the-environment, reduce-traffic-congestion, budget-neutral tax shift.
There’s more – and it’s, er, stimulating, although his skepticism of all government spending projects in a depression strikes me as excessive.
The Dish 