The Real Slayer of Keynesianism Came with the Double-Digit Inflationary Recessions of the 1970s and 1980s

But the real slayer of Keynesianism came with the double-digit inflationary recession of 1973–74, followed soon by the even more intense inflationary recessions of 1979–80 and 1981–82. For if the government was supposed to step on the spending accelerator during recessions, and step on the brakes during booms, what in blazes is it going to do if there is a steep recession (with unemployment and bankruptcies) and a sharp inflation at the same time? What can Keynesianism say? Step on both accelerator and brake at the same time? The stark fact of inflationary recession violates the fundamental assumptions of Keynesian theory and the crucial program of Keynesian policy. Since 1973–74, Keynesianism has been intellectually finished, dead from the neck up.

--Murray N. Rothbard, "Keynesianism Redux," in Making Economic Sense, 2nd ed. (Auburn, AL: Ludwig von Mises Institute, 2006), 47.