Also, whilst Keynes had a number of policy preferences which are unfashionable now ('euthanasia of the rentier' through sustained low interest rates being one), the General Theory explicitly was about how governments could soften economic contractions like the one we're experiencing now, and explicitly wasn't about governments running structural deficits. At various times he argued that higher taxes were necessary and desirable if the government wanted to use more resources, and that government funded services were more desirable than widespread redistribution payments.
We are in a period of sustained low interest rates. It would be interesting to see if the percentage of people who own their home is going up as a result. I can anecdotally tell you that the interest rates being so low are motivating me to try to get a home loan ASAP despite the prospect of mortgage insurance because I personally do not believe that the interest rates will stay low forever...
Stagflation happened because of the oil crisis. This wasn't something that undermined keynesianism at all, it was simply a disaster exploited to push what eventually became trickle down.
> Keynes worked until stagflation happened. That's the issue that made other models come forward
Keynes worked after stagflation as well:
> I just do not think that is right. Stagflation is very easily explained: you just need an ‘accelerationist’ Phillips curve (i.e. where the coefficient on expected inflation is one), plus a period in which monetary policymakers systematically underestimate the natural rate of unemployment. You do not need rational expectations, or any of the other innovations introduced by New Classical economists.
[…]
> Stagflation did not kill IS-LM. In fact, because empirical validity was so central to the methodology of macroeconomics at the time, it adapted to stagflation very quickly. This gave a boost to the policy of monetarism, but this used the same IS-LM framework. If you want to find the decisive event that led to New Classical economists winning their counterrevolution, it was the theoretical realisation that if expectations were rational, but inflation was described by an accelerationist Phillips curve with expectations about current inflation on the right hand side, then deviations from the natural rate had to be random. The fatal flaw in the Keynesian/Monetarist theory of the 1970s was theoretical rather than empirical.
> But my small quarrel with Simon involves how we got into this state. He dismisses the stagflation of the 1970s, on the grounds that IS-LM macroeconomics quickly adapted to the new information. Indeed, this happened very fast: by 1978 both the leading undergraduate macro textbooks, Dornbusch-Fischer and Gordon, had accelerationist Phillips curves and extensive discussions of stagflation. (Compare this with new classical macro, which failed decisively in the 1980s, but never adjusted at all.)
> Nonetheless, I remember the 70s quite well, and stagflation did indeed play a role in the rise of new classical macro, albeit in a subtler way than the caricature that it proved Keynes wrong, or something like that.
> What mattered instead was the fact that stagflation had in effect been predicted by Friedman and Phelps; and the way they made that prediction was by taking a step in the direction of microfoundations. Specifically, they asked what a more or less rational price-setter would do in the face of persistent inflation; their answer was, raise prices preemptively, and if everyone did this it would shift the Phillips curve up by the amount of expected inflation. Sure enough, the Phillips curve did seem to shift as predicted.
Your quotations are actually in violent agreement with the poster you're responding to.
The accelerationist Phillips curve and various types of rational expectations based microfounded models you reference are, for better and for worse, the newer 'other models'.
Arguments advanced upthread that Keynes (and recent events) implies that the government could eliminate all poverty and unemployment through continuous money printing without consequence, or 1960s Keynesian arguments the government could at any point trade slightly higher inflation for lower unemployment (which were influenced by but not made by Keynes) were the casualty.
One thing both the original Keynes and modern mainstream interpretations have in common is they viewed large deficits as a tool for fixing the imbalances of a recession rather than the natural way of paying for things.
And of course, the hyperinflation episodes of those countries (and others) did really happen
But maybe the issue is giving the money directly to people instead of using it to pay government debt