If you want the Economy to move, put it on a train

Larry Summers believes we could possibly at the most dangerous moment since the financial crisis began.  There are calls from others for another stimulus package. I do not like another stimulus package because it a transfer payment that is just a band-aid.  Larry, calls for several options, one of which is  makes for propping up the economy through infrastructure investment.   The idea is that it will spur new job growh (especially in construction sector).

I like the idea of infrastructure investment, and to be specific the Federal Government should invest in public transport infrastructure (trains, subways, mono-rails) across cities.  With as prices on the rise and existing public transit not designed to handle the increased traffic, the secondary effects of improving or install mass transit systems are much more than any other infrastructure projects.  There is precedence to such investment, it is the Interstate Highway network that propped up the economy in the past.

The problems with any Government investment is, one how  to fund it and second the risk of inflation.  To first one can be addressed by increasing the gas tax (which is bound to have secondary negative effects on the economy and inflation). But  in the long run we would have effectively addressed the energy crisis, reduced urban sprawl, and changed people behavior. 

So if the Government wants to help the economy, put it on a train (an electric one).