If Keynes's predictive model was so good then why has every application of his theory, whether in the US in the 30's, 70's and now, Japan in the past couple of decades, etc. failed so miserably? On what basis are you claiming that Detroit's collapse was structural, rather than being caused by bad governance? Other areas of the US, and other countries for that matter, have seen their main industries decline, but they've managed to replace them with others without suffering the total disaster that Detroit as.
Re: Keynes. It's hard to be a failure when no major nation adopted Keynes' approach in the 1930s. It was far too new, though he was certainly trying to convince people.
Keep in mind General Theory wasn't published until 1936. FDR didn't become a convert until 1938 -- after his attempt to balance the budget in 1937 led to a disastrous recession that undid a lot of the prior gains from the depression (the US government had a budget surplus!). WW2 spending was what wound up being the stimulus that dragged the world out of the recession.
Liaquat Ahamed's _Lords of Finance: The Bankers Who Broke the World_ goes into great detail as to why the great depression occurred (the Gold standard), and why it lingered.
I also think you may want to read more into Japan's economic policy and financial history. Japan's troubles started with a financial crisis and asset bubble bust twice - in the late 80's and late 90's, similar to the global 2008 crisis, Except Japan had a much, much weaker institutional response than the USA and even the UK did. They shuffled almost annually through a series of milquetoast PMs. Their central bank governors wouldn't commit to anything. Japan had to nationalize a lot of the private losses and bank bankruptcies that were occurring while contending with no growth and a deflationary spiral. Japan's debt was not the result of Keynesian stimulus (that would have required sudden and massive expenditure, given the size of Japan's economy), it was the result of "keeping the lights on" in an era of almost no growth.
Now, in 2013, Abe and Kuroda are finally attempting what looks like a quasi-Keynesian approach -- massive quantitative easing to drive inflation expectations skyward. I say "quasi" because it's not a fiscal stimulus (people are too nervous to try given their debt-to-GDP ratio). And this approach is more Krugman than Keynes. It will be interesting to watch.
Detroit was a case of structural problems combined with bad governance. Sorry if that was not clear. It was a side point to basically say that Southern Europe is not Detroit. They were a victim of private excesses fed by capital flows from the North and a lack of EU-wide fiscal integration to cushion their economy after the crisis.
