As soon as the election is over, law makers are expected to turn their focus to a new fiscal stimulus package regardless of who wins the presidency.

Citi Global Wealth Management Chief Investment Officer Edward Kerschner says if the past is a guide, the best solution will be to include infrastructure investment in that package.

"I think the key is job creation and keeping unemployment from getting high. Infrastructure spending, especially transportation, has a high multiplier. Anything that creates consumption to some degree creates jobs," said Kerschner in a phone interview.

The White House has weighed in on this idea and says infrastructure projects take a long time to get started. The impact on the economy, therefore, could be too long in coming. But Kerschner points to a report done by Stanford University that shows plenty of infrastructure projects have been approved and permitted but just lack adequate funding. Stanford found there was an estimated $15 to $20 billion in approved infrastructure projects that could be ready for financing within 30 days.

"It's a key part of the solution," said Kerschner. "How do we fix the problem is the most asked question that I get."
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In a note last week, Kerschner laid out the three steps he believes are necessary for economic recovery. The third step was the infrastructure program. The first two steps have already been taken - emergency action to reshape the banking industry and appropriate monetary policy. Kerschner references in his analysis the past experiences in the U.S. in the 1830s and 1930s and in Japan in the 1990s. He said all three steps are necessary.

"That's why Japan failed. While they did fiscal stimulus, they never fixed the banking system," Kerschner said.

"We learn from our past mistakes. Infrastructure spending wasn't even an instrument of policy until FDR," he said. "One of the reasons (President Franklin) Roosevelt was successful was that he tried lots of things...One reason it took so long was because it didn't all work."

• US Manufacturing Shrinks To 26-Year Low in October

Kerschner said its positive that foreign governments are also discussing infrastructure projects. "In the U.K., they're talking about bringing forward spending that was going into 2009 and 2010," he said. Germany is also discussing stimulus.

I asked Kerschner if he thinks it's likely a stimulus package would be approved before year end. He said it is possible and it's important that House Speaker Nancy Pelosi said she hoped to reconvene on stimulus after the election. "Hopefully we don't do nothing in the lame duck session," he said.

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