From Super-Economy, one of my favorite economics blogs, comes an analysis of the Japanese economy for the past twenty years that claims their economic performance has actually not been so bad. If you look at things like productivity improvements, and economic growth per working age adult, Japan does as well as any other First World country. What they lack are working age adults.
I've said here before that the Japanese people seem to be doing pretty well despite the persistently negative impression that one gets from the business news. This impression is quite different than the information contained in the economic analysis linked above, which emphasizes that demography matters. However, I think together the two indicate that changing demography is managable, and need not necessarily result in panic. Remember, DON'T PANIC.
I recently finished a biography of Keynes, so a review will be forthcoming. However, it does seem to me that Japan is one of the countries that actually implemented something that could truly be called Keynesian economics, because Keynes himself focused on deficit spending to build infrastructure, whereas it was his students and disciples that came up with the idea of using consumer spending in the same way. Japan, however, long focused on using public moneys to finance construction projects, something that failed to fix their most recent crisis. It did however work pretty well up till then.