Here is an example of the resistance that professional economists show to adhere to the standard Keynesian prescriptions for an economy with ample spare capacity (and high unemployment). Justin Yifu Lin, Chief Economist of the World Bank, writes in an article entitled "Beyond Keynesianism and the New Normal":
The above risks to a sustained recovery are directly or indirectly related to the simultaneous existence of large excess capacity in the high-income countries. In my view, a global push for investment along the line of Keynesian stimulus is the key for a sustained global recovery; however, the stimulus needs to go beyond the traditional Keynesian investment ... But how can the Ricardian trap be avoided, i.e. an outcome where the government stimulus fails to boost aggregate demand because economic agents expect future tax increases to pay for larger deficits and thereby increase savings? To avoid the Ricardian trap, it is important to go beyond conventional Keynesian stimulus of “digging a hole and paving a hole” by investing in projects which increase future productivity.
So in the presence of large excess capacity he is in favor of policies intended to increase demand. But he is concerned that the standard policies (e.g. increase government spending) will not work this time. And this is because the private sector might undo the actions of the government by saving more (to pay for future taxes). The proposed solution is to direct government spending to activities that increase productivity so that output and incomes grow (and this helps keeping private spending up and tax revenues).
No one can disagree with the statement that if the government can choose between different spending projects, it should select the one with the highest return (in terms of productivity and income). But we need to understand that the advice for the government to invest
