The progressive issue many progressives don't seem to like

[girl gone mad]

94. Keynesian policy would fail, were it implemented.

As Richard Koo has rightly illustrated, the world is in a balance sheet recession.

I'd also recommend Koo's book The Holy Grail of Macroeconomics: Lessons from Japans Great Recession to further understand why Keynesian theory falls short in our current economic environment.

The stimulus did fail, and not just because it was insufficient, it was also structured very poorly. What's more, until we address the excess flow of credit to speculative activity and reduce our trade deficit, monetary stimulus and badly designed fiscal stimulus will always end up fueling asset bubbles and contributing little toward productive economic activity.

The current balance sheet recession and debt deleveraging cycle make monetary easing fundamentally useless. People with impaired balance sheets are not interested in increasing their borrowing at any interest rate. I'd look even beyond Koo's proposals and listen to what the Kansas City School has to say since Koo believes governments must borrow and spend to make up for the excess private sector savings, while MMTers understand that the government doesn't need to borrow (and that government borrowing is not true borrowing anyhow).