i know this is an old post, however 'creating demand', when that demand isn't based on the desire of the consumer will create bubbles.
the housing bubble is the perfect example of this. the government intervened passing laws like the community reinvestment act which created a forced demand for houses. we know where this ended up.
another example of keynsian failure is with green technologies. solyndra etc... GM had a failing business model so instead of letting them fail and restructure their company the government bought them and forced them to make such things as the chevy volt.
the volt is a dismal failure and has as much as 250,000$ per car of federal subsidies behind it... who pays for that?
we are taking money from the taxpayer at a huge rate to recoup only 41,000$ per car... this is the stupidest idea for a business model, it will ultimately fail when that subsidy can no longer be provided. and who pays for that?