The temporary payroll cuts seem to be much better stimulus. I would also suggest doing the payroll tax cuts by exempting the first $75k of income and raising the taxed income to $250k or more. This would bring in more payroll taxes than a pure holiday while giving only those who would immediately spend it the cut.

Create a “Federal Stimulus Commission (FSC)” whose task is to regularly adjust at least the spending-class’ taxes (payroll tax, etc.) and perhaps some short-term infrastructure budget as well, in such a way that as demand fluctuates, spending-class incomes and infrastructure spending would rise or fall within limits set by Congress but without direct or explicit intervention from Congress. Just as the Federal Reserve is given inflation and unemployment as the metrics to optimize, the Federal Stimulus Commission would be given appropriate targets. The general rule would be that when demand weakens and people start saving, the FSC would increase spending-class incomes and infrastructure spending to provide stimulus. When demand strengthens, the FSC would return to more austere policies and reclaim the revenues needed to pay down the debt…

Certainly the bulk of fiscal policy will and should always remain political. However, there should be some room at the margin for disciplined, non-political management of fiscal policy. A non-political Federal Stimulus Commission that worked in tandem with the Federal Reserve could go a long way to relieving inevitable swings in economic conditions. The FSC would also serve as the partner that the Federal Reserve needs at times like this when, as Bernanke clearly says on a regular basis, monetary policy alone cannot do the job.

Yes, I am a dreamer.