On the topic of rescussitating the economy, funding public works projects would certainly have better long-term success than the current QE policy (i.e. the FED buying securities that never should have been legally issued in the first place).
Even better would be a modern debt jubilee, a la Steve Keen's suggestion, in which all citizens are given a cash infusion that automatically pays down any outstanding debt, if present, or becomes a liquid asset if the citizen is debt free. This would reset the monetary system back to a state in which further investment can be financed within the system. The amount would of course need to be controlled so as to not induce immediate inflation, and restrictions on banks (e.g. Glass-Steagall) would need to be reinstated and enforced so as to delay the inevitable return to record high private debt levels.
But the problem is exactly that this correlation doesn't seem to apply in the opposite direction today: decreasing interest rates are not generating inflation across the board, quite the opposite. You can debate why that is the case, but that's what we see: central banks keep cutting rates expecting economic activity to get hot and generate inflation, but this is not happening. The Japanese experience would seem to indicate this is "the new normal", where monetary policy is simply a brake and not an engine; which means we have to find alternative engines.
Enabling (arbitrarily) negative rates is equivalent to lifting the power limit on the engine and would simply allow the driver to keep the car at constant speed on all hills (the brakes already have unlimited power)
The economy is not physics - it's psychology.
http://www.economist.com/news/finance-and-economics/21569378...
Which is why any real recovery from the current state of play can only be led by industrial and economic policy led by the State itself. The State will have to mass-hire and build something, anything, to kickstart new economic activity, because the private sector is just not going to do anything.