I would also suggest something like granting karma points for sniffing out SPAM in case the YC News gods agree that a reported link does indeed turn out to be spam.
Alternatively, a system of "open moderation" would be good as well (to lessen PG's load). In this case, moderation of the site would fall upon a rotating schedule between users that have reached a certain level of karma points. Like jury duty, you have a queue of sites that have been flagged for review, and the member's job is to merely approve of something as spam or not and have it dealt with. A link would have to be scrutinized by the random "committee" (which ideally should be a random percentage of YC News members on a regular schedule) and a majority vote would determine collectively if a link is spam or not.
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Apologies for making this post so long....
1) have a "report" button
2) who ever is on "spam patrol" would see a reported link highlighted
3) "spam patrol" would have their "report" button substituted by a "confirm" button
4) after enough of the "spam patrol" confirms a link as spam, then the link is automatically marked for deletion
The advantage of such a system is that there would be some filtration of the links and spammers would (hopefully) be discouraged.
An "emergent" advantage would be to uncover spam sites. I can even imagine a number of social sites adopting a scheme creating a collaborative spam filter (ok, yes I'm spinning this out of control, but what the hell, I'm sure everybody here thinks like this!). This would be a social solution to a technical problem.
If reddit had such a system, then a collaboration between YC News and reddit would pre-emptively eliminate confirmed spam sites from one another. Using this example, a number of social sites could immediately benefit from an open database of spam filtering (akin to the use of OpenID). So a confirmed spam site on reddit would automatically translate into a confirmed spam site on YC News, or whoever else subscribes to such an open database.
Is this too complex of an idea???