Keynes to Neoclassical to ???

Today we learned about the two most prominent models of macroeconomics and how they have both become moderately obsolete. The Keynesian model, though it held up for a number of decades, was proven to underestimate the impact of inflation. As the United States poured billions of dollars into the Vietnam War, the country was forced to send more and more money overeas and Nixon eventually severed the link between the dollar and gold imposed by the Bretton Woods system. This, in conjunction with the OPEC oil embargo in the early 70s (which was imposed over the West's aid to Israel), gave way to what has been termed stagflation. The Keynesian model seemed faulty and economists looked elsewhere. Neoclassicism, though it had been taught in universities for just as long as the theories of Keynes, finally came into vogue in the late 70s, aiding Ronald Reagan in his election.

Surprisingly, this was not all it was cracked up to be. Paul Krugman writes:

"traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us"

This has much to do with lowered taxes.

From K's Economics 101

But back to the effects of neoclassical economic theory:

"We weren’t always a nation of big debts and low savings: in the 1970s Americans saved almost 10 percent of their income, slightly more than in the 1960s. It was only after the Reagan deregulation that thrift gradually disappeared from the American way of life, culminating in the near-zero savings rate that prevailed on the eve of the great crisis. Household debt was only 60 percent of income when Reagan took office, about the same as it was during the Kennedy administration. By 2007 it was up to 119 percent"

These rational neoclassical economists informed the government and consumers that debt was, in fact, a good thing. The more the better. And now here we are, with millions of Americans foreclosed upon for their inability to pay mortgages their banks told them would work for them. The best time for instituting change is when doing so won't destabilize the system. The easiest time to institute change is when the system is already evidently destabilized. Economically, where should we go from here? (disregarding that those who destabilized the system are stronger than ever and the American people are, at best, apathetic)