Socialists can never really be proven wrong in their own eyes, because we will never see a fully socialist system. Even the worst of the worst, like the old Soviet Union, was not 100% socialist. They relied, at least to a certain extent, on production and prices from other places, which guided their central planning. As Ludwig von Mises pointed out, socialism has to collapse due to a lack of a pricing system.
Even Keynesians, such as Paul Krugman, can never be proven wrong in their own eyes. Someone like Krugman will always say that we should spend more and run bigger deficits. Whenever the economy is showing bad news, Krugman will always say that it is because the government didn't spend enough or because the central bank didn't print enough.
If Krugman became dictator of his own country, what would he do? He would be free to spend as much as he wanted. Things would collapse quickly, or else he would have to admit that the government/ dictator has to show some restraint. It is so typical of the left to throw their own under the bus when something doesn't work out.
I think it is funny when you get a really leftist state or city where they keep electing Democrats and they get into a major budget crunch. At some point, either a Republican gets elected or else the Democrat is forced to make budget cuts, or at least show some restraint. Then the left will throw that person under the bus saying that he shouldn't have made those cuts. Either that, or they will ignore it.
But the reality is that budget restraint is forced upon those in office at some point. It is simply impossible to keep spending ever greater amounts of money. The money simply isn't there. These leftists are asking others to defy gravity. It is easy to preach that we (meaning the government) need to spend more money on schools, on infrastructure, on healthcare, on the needy, etc. But at some point, it is just not possible to spend any more.
Even Obama has been somewhat limited. The budget increased much faster under 8 years of George W. Bush. Since the first year Obama was in office, the federal budget has not increased much at all. It is just that he is starting out with a much higher number than where Bush started out. So in that sense, Obama's spending is worse. But the budget increases are far less. I would wager that things would not be that much different if the Democrats controlled the House. What would they have done, run $2 trillion yearly deficits and risked a complete meltdown?
So the left will always find excuses. If the economy is bad, it will be because of the Republicans gutting education (which increased much greater under Bush), or because there aren't enough regulations, or because of greedy businessmen, or because of too little taxation on the rich. It is amazing that Democrats still find these same excuses today with the massive spending and deficits and regulations. Again, it is never enough.
It is important for libertarians (and others who are free market oriented) to constantly point out the fact that we do not live in anything close to a true free market. Yes, the U.S. is far better than Cuba or North Korea or many other places around the world. But that doesn't change the fact that we have big government controlling our lives and the economy.