Maggie's Farm

Regarding low interest rates and why they aren't working, there is also this article:
http://www.zerohedge.com/news/guest-post-human-action-under-ultra-low-interest-rates

Which is a pretty good analysis of the situation. If you believe, as Keynes and many others do, that consumption drives everything in the economy, then keep doing what you're doing.

But before consumption you need production. Say's Law, essentially, is that production creates consumption. And a simple way of looking at whether this is correct is to think way back to our earliest ancestors.

We needed to consume just enough food to survive. So the assumption is consumption is what drives everything, right?
Wrong. It's a motivating factor, but consumption cannot occur without the production factor occurring first, either through hunting and gathering, or farming.
Farming proved to be useful because rather than getting only as much as you needed while doing the hunter/gatherer thing, you could suddenly have surpluses.

Surpluses led to better health (greater consumption) and the development of an economy (barter for other food and goods).

Without production, you don't have surpluses and a better overall economic environment. Indeed, production created more consumption.

And in times of economic peril, surpluses were used to stem the tide (think the story of Joseph in Egypt). This is a very rudimentary form of austerity, though the situation was typically forced on people due to drought.

Consumption is a motivating factor, it is not what creates an economy. Interest rates at zero implies time has no value, which creates a host of new issues that need to be dealt with.

I'm well aware of what Keynes called it.
But, as the article I linked to points out, Keynes had no theory of capital and was bound to the attraction with consumption, rather than production, as the guiding force behind his theory.

The idea that you can artificially (as we are now) making rates zero, through the creation of credit is not only incorrect, but its presumes that the issuance of credit can boost consumption - once again putting the cart before the horse.

The key to growth, in a situation like this, is debt reduction and capital re-formation.