There are at least a couple of problems here that have not been sufficiently addressed.



1) Politicians are currently looking to the socialist teachings of Karl Marx, when they should be paying more attention to Groucho Marx:



“Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies.” – Groucho Marx



No one has apparently learned the lessons of the failure of Socialism. This is especially surprising since the collapse of the former USSR happened only recently.



"The problem with socialism is that eventually you run out of other people's money [to spend]." - Margaret Thatcher



2) Economists look to the theories of Keynes when they should be looking to the Austrian school.



"The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers' stone to make it last." -- Ludwig von Mises (1940)



The scientific method calls for testing and validation of the hypothesis/theory. Clearly the Keynesian approach has failed. What is needed is a return to free markets and a reduction in the size and scope of governments. The larger the public sector the smaller the private sector. Free markets are remarkably resilient when left to their own methods and without the intervention and financial repression of those who think they know better. This is not rocket science, although I don’t think that economics is really a science at all but rather a method to provide governments with reasons to pursue their own agendas. Apparently Adam Smith is not part of the current curriculum.



The current period of economic stagnation is self inflicted, brought on by free spending policies and fiat currency that allowed deficit spending to go on (and on, and so forth),



Where is the demand? It was pulled forward by borrowing against the future. A similar period existed in the 1930’s following the “roaring 20s” excesses of spending and debt. History repeats. We now have over-indebtedness and weak demand as deleveraging rules the day. Until both the public and private sector balance sheets are restored to health the malaise will continue. No amount of additional spending, fiscal, extraordinary (i.e QE), or otherwise with fix the fundamental problem.



“You cannot spend your way out of recession or borrow your way out of debt.” - Daniel Hannan, Member of the European Parliament



Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall. All the King's horses, And all the King's men Couldn't put Humpty together again!