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While infrastructure projects might be great for longterm economic stimulus, it'll take several years for that money to flow into the economy (a bridge isn't designed and built in a day, let alone a highway or rail network). What this economy needs is a powerful short-term stimulus, preferably one with a powerful longterm impact - both for consumers and for the economy as a whole.
I think Washington should offer up tax credits, up to $1,000 a household, for the purchase of energy-efficient, North American-made durable goods. Items which are in the top 25% of their class in terms of energy efficiency - cars, refrigerators, hot water heaters and so forth.
This would be a great way to stimulate the economy without sending trillions to China, and it would have a lasting impact, both for the country as a whole as well as for individual consumers. It would increase our national energy efficiency virtually overnight, and it would save millions of households hundreds of dollars a year on energy going forward - money they can spend and invest on more productive activities, from education to insulation.
Best of all, a lot of consumers would opt to make those purchases right away, but the tax credits wouldn't have to be paid out until sometime in 2010, after they've filed. So it would function as a hundred-billion dollar, interest free loan to Uncle Sam for 4 - 16 months. Can't get better terms than that.
This would probably do a lot more to bail out Detroit than any handout - and a lot of Japanese, Korean and German cars would also be eligible, if they're made in the United States and are energy-efficiency leaders in their class.
