At heart, the Keynesian analysis is remarkably simple. The private sector suffered large losses in wealth due to the housing crash. As a result, it reduced borrowing and spending and increased savings (or were forced to do this by creditors).
The problem is that on the level of the economy as a whole, where my spending is your income, if everybody (or at least a large number of people) start to do this, the economy can easily spiral down, and this is exactly what happened. This process can easily feed on itself