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I’m a believer in “biflation”. You can’t get anything positive out of keynesian monetary manipulation because it breaks the second law of thermodynamics (that is, you are not adding any positive information to the system). But GDP= M*V, so you can EITHER get inflation through M or deflation through crashing V. So you get both, pushing on a balloon.

Well, yes. Biflation is a reality under the scenario which you mentioned and it actually happened during the Carter years. People weren't buying things, especially big ticket items, because they couldn't afford 18% and 21% interest rates. So you had a big reduction in V to more than off-set the increase in M.

Same thing happened during Japan's lost decade: deflation plus a reduction in V albeit for a different reason, namely fear of the future. The trouble is that the Keynesians were trying to paint this as a normal and everlasting situation. Thus the Phillips Curve theory and the Carter philosophy that everything would be fine if we all turned down the heat, put on sweaters and accepted a lower standard of living.

Said tactics did keep the Soviet Union running for 75 years before they finally collapsed, but it still wasn't permanent. Even more than the appeal of Reagan, it is also what got Carter thrown out of office back when we had a more informed electorate.