Paul Krugman slams the moves for tax cuts arguing that the US economy is about to fall into an abyss*. The question really is the size of the cuts - if big enough they can provide as much stimulation as a fiscal expansion. At times Krugman allows his Republican hatreds to override his reason.
Greg Mankiw on the other hand argues that the US should utilise a revenue neutral payroll tax cut coupled with a gradually increasing tax on gasoline. One conspicuous advantage is that tax cuts have an immediate impact whereas well-planned fiscal investments have significant implementation lags.
The Mankiw move has its attractions. It replaces a stupid tax on jobs which damages employment with an environmentally sensitive tax that (however imperfectly) helps reduce congestion, pollution and of course greenhouse gas emissions. We could think about similar sorts of moves in Australia where rates of payroll tax are comparable to those paid in the US.
* That is not an exaggerated claim. 598,000 jobs were lost in the US in January 2009 with unemployment up to 7.6% of the workforce compared to 4.9% in January 2008.