Richard Nixon once said, "We are all Keynesians now," in an acknowledgement of John Maynard Keynes's influence on reflationary thinking. But the stag­flation that begun under Nixon's administration in the 1970s put the great ­British economist out of fashion. Now he appears to be making a comeback.

Whether it is Barack Obama proposing a $170bn (€124bn, £97bn) economic stimulus package, his colleagues in Congress upping that number to $300bn, or a Republican administration taking equity in the private banking sector, the ideology of what George Soros calls "market fundamentalism" is, at least temporarily, ceding ground to Keynes.

A few months ago, Mr Obama would have found it too risky to propose so much new spending so close to election day. Under Bill Clinton in the 1990s, the Democratic party slowly and painfully built a reputation for fiscal conservatism and bequeathed a large budget surplus to George W. Bush in 2001.

By the most recent, but now completely outdated, estimate, Mr Bush was projected to leave a $430bn budget deficit to his successor in 2009 - a number that is likely to move closer to $1,000bn as Congress, the administration and the presidential campaigns embrace more stimulus spending.

More importantly, Mr Bush also bequeathes an implicit recognition that markets are not necessarily good at self-policing - an insight that was central to Keynesian theory.

"Just as there are no atheists in a foxhole, so there are no market fundamentalists in a crisis like this," says Jared Bernstein, an economic adviser to Mr Obama. "The same point applies to fiscal spending. If we were to tighten our belts now then we would repeat the mistakes of the Great Depression from which Keynes produced his General Theory."

The lapses into Keynesianism take different forms. For Republicans, it is a time to propose new tax cuts for small businesses, including a waiver of the capital gains tax, which many believe would help stimulate economic activity. For Democrats, the preferences are for an extension of unemployment insurance, food stamps and assistance to struggling homeowners.

Others, including doyens of the Clinton administration, such as Lawrence Summers, his last Treasury secretary, have recommended investing in infrastructure and other measures that would raise long-term growth. Keynes famously recommended burying money and paying people to dig a hole and find it.

"What we are seeing is a complete hodgepodge of economic reactions to this crisis few of which were in circulation a few months ago," says Maya McGuiness, director of Budget Watch, a non-partisan group in Washington. "Keynes would have recommended getting as much cash to the cash-strapped as quickly as possible. Most people would now agree that we cannot afford not to spend more public money quickly. The question is what we do in the medium term."

Keynesian demand theory would have told the Bush administration to have aimed for budget surplus during the growth years between 2002 and 2007 so that it would have had more firepower to tackle the crisis now. In other words, the government should save when everyone else is spending and spend when everyone starts to save. That would suggest a return to budget discipline once US growth has been restored.

But some economists worry that the habit of spending might be putting down deep roots in both US political parties. "Fiscal policy should be counter-cyclical - that is Keynes's central point," said Ms McGuiness. "We should be spending now. But we also need a plan of how to move back to budget discipline as the economy recovers."

Likewise, Washington's move to supervise previously unregulated areas of the financial markets, such as derivatives, and the decision to take $250bn of federal stakes in large private banks, might also prove to be more enduring than expected. In the last two days, Mr Bush, Ben Bernanke and Hank Paulson have all reassured the markets that this unlikely Republican embrace of nationalisation does not equate with socialism.

"The government's role will be limited and temporary," Mr Bush pledged yesterday in what was his 22nd statement since the latest phase of the crisis began four weeks ago. "These measures are not intended to take over the free market but to preserve it."

The outgoing president's forecast might well come true - and an Obama or McCain administration would divest those stakes one or two years from now. But as Keynes said: "Long run is a misleading guide to current affairs. In the long run we are all dead." Or as Milton Friedman - Keynes' ideological foe - remarked: "There is nothing so permanent as a temporary government programme."