Actually, he did, and admitted as such to Hayek in the few years he had before he died. He admitted that after looking at the data and seeing the effects of his policies that he may have been wrong after all. Hayek's response was that of a classic gentleman.

Yes. But I disagree with your point that Keynsian policy was used in the 40s and 50s. 1. Even Roosevelt knew he needed a strong economy and he brought in a number of Republicans and business people in his 3rd term and backed off the insane tinkering with the economy. The production capability of Europe had been severely wiped out. Short of the insane economic policies of R, which Truman and Eisenhower did not follow, low hanging fruit-producing for these foreign markets. We were the technological leader in the world at the time, we were just in a good position.
2.We strengthened our patent laws in the eary 50s, in response to bad supreme court cases, which stimulated the creation of ne inventions, which is the only way to increase real per capita income of a large group of people over any extended period of time.
3. Third world countries, can raise their standard of living quickly by just acquiring technology. But we have to invent.

Soooo, you a fan, FDG? You a Keynesian?
One o' the "It's-a-great-idea-that's-seldom-correctly-applied" crowd?

Just wonderin'.

The fundamental problem with Keynesianism is the fundamental fallacy that government is a more effective and efficient allocator of capital than the free market. Remember, every single dollar government spends comes from taxes - ie money the people would have spent in ways that benefited them if they had had the chance. Taxes have a huge opportunity cost tied to them. The higher the tax, the less the economy has. Every dollar of taxes is one fewer dollar that individuals have to improve their way of life and one fewer dollar companies have with which to purchase capital or hire more labor - or simply to ride out a downturn.

Government is essentially overhead - and in today's government a huge bloated bureaucracy that consumes the equivalency of our entire national production every year. Successful businesses are those who keep their overhead costs low, allowing them to focus the majority of their capital inputs on the productive aspects of the business rather than simply paying managers' salaries. And we haven't even gotten into the problems with graft, corruption, and cronyism, which are rife in our government today.

If Keynesian economics actually worked, we should have seen huge economic boosts from both the Bush and Obama stimulus packages. What did we actually see? Stagnation at best. Why? Because government spending doesn't promote long-term growth or stability. Only investment in the free market brings that. I would also point out that neither of those spending binges used funds on hand - they used borrowed funds and the printing presses (bringing inflation into the fray to further erode the actual buying power of those very dollars and every other dollar in circulation).

Keynesian economics have never worked and will never work. They didn't work during WWII. They didn't work during Carter's time (just compare to Reagan). They didn't work during either Bush II or Obama. The sooner we recognize this and realize that economic power can and must reside with the people for long-term economic stability, the better off we will all be.