When a successful company invests, it invests in productivity, it invests in new products, it invests in innovation, it invests in growth strategies and it invests in the future. When a struggling company invests, it invests in short-term survival solutions.

The global economy is struggling. Canada’s economy is beginning to struggle. I’m concerned by what I’m hearing from our political leaders. Most are talking about near-term investments (stimulus) in job-creating, “shovel-ready” infrastructure projects, tax cuts, improved EI benefits and job-training programs to ease the pain of job loss or layoff.

In my opinion, it would be more responsible and gutsier to invest in longer term projects that would grow and sustain our economy.

Anyone (who is properly trained) can build a bridge or a highway but not everyone can be inventive. Infrastructure projects do not have to be limited to roads bridges, schools and hospitals. They could be investments in alternative energy projects (wind, tidal, wave, solar, geo-thermal, etc.). They could be investments in new and innovative products.

My point is this. Economic crisis or the imminent threat of crisis demands investment in our social infrastructure but it should also be viewed as an opportunity to invest in long term economic growth.

Based on history, we know the recession won’t last forever. We also know that the world needs more food. The world needs to reduce its carbon emissions. The world needs to house its people. The world needs clean energy. The world also needs more efficient ways to use the energy we already have in our possession. We should be investing in things like land-based aquaculture, greenhouse farms, more fuel-efficient transportation and modular housing.

Many of the stimulus options being advanced today are based on Keynesian economics the ideas of twentieth-century British economist, first published in 1936. By his standards, the state should stimulate economic growth and improve stability in the private sector by lowering interest rates, lowering taxes and investing in public projects.

Over the last eight years, the United States has followed many of these practices and look where it got them. Lower taxes helped to create their huge deficit. Interest rates are near zero but demand for goods and services continues to fall. Public project investments have been confined to bailout of the financial sector and it may require another shot in the arm.

Keynes contended that aggregate demand (the total demand for goods and services in the economy at a given time and price level) is insufficient during economic downturns, leading to unnecessarily high unemployment and losses of potential output. Keynes argued that government policies could be used to increase aggregate demand, thus increasing economic activity and reducing high unemployment and deflation.

Keynes argued that Government investment in infrastructure results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. In other words, the initial stimulation starts a cascade of events, whose total increase in economic activity becomes a multiple of the original investment.

John B. Judis, a senior editor of The New Republic and a visiting scholar at the Carnegie Endowment for International Peace writing in the New Republic says “most economists agree that what finally pulled the U.S. out of the Great Depression was military spending for World War II. Some liberals argue that if the Roosevelt administration had not abandoned a Keynesian stimulus strategy in 1937-38, the U.S. might have gotten out of the depression without a war but in 1936, unemployment was still at 16.9 percent.

By 1942, after two years of war spending, it was 4.7 percent, strongly indicating that it was war spending that did it. I am not suggesting that the United States start a world war in order to solve the world's economic problem.

But I am suggesting a strategy that could be called the fiscal equivalent of war.

It would consist not merely of updating or repairing the nation's infrastructure, but in undertaking massive new investments that would expand the scope of American industry, and address other urgent problems in the process: global warming, over-reliance on petroleum, and the need to revive America's domestic manufacturing capabilities - not just to provide jobs, but also to provide tradable goods that can reduce the country's current account deficit”.

Judis went on to propose a massive investment in high-speed rail. In Western Europe and Japan rail speeds can be up to three times faster than North American trains and many of them run on electricity. They would be the most energy-efficient and quickest means of getting between places like Boston and New York, or Los Angeles and San Francisco.

Investing in high-speed rails would be very expensive but unlike tax cuts (benefits can be siphoned off by the purchase of imported goods) the money spent would go directly to reviving American industry and improving the country's trade balance.

That doesn't just mean jobs creating dedicated tracks or new rail stations. He says “this kind of production could be undertaken by our (U.S.) ailing auto companies or aircraft companies.

Building trains that would run on electricity would also be a paradigmatic example of the "green jobs" that President-elect Obama often touts. I like this man’s thinking.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com