Sorry for not posting sooner. Sick child in the house.
That's a bold assertion. What happens when they spend all the money on consumer goods produced in Asia?
Irrelevant. Those goods may be produced in Asia but they are sold by people with jobs here - advertisers, retail staff and so forth. I'm not up for getting into a massive discussion about it but take a look at http://cafehayek.com/myths-and-fallacies and some of the articles there. You should have more respect for his opinion than mine. To answer the second question, I'm not an economist but he is.
I find it interesting that you mention "Even the Austrians..." because I was just reading about that today. I really need to use some sort of web clipping addon.
Anyway, I would have to say I align myself pretty strongly with Hayek but my personal philosophy is whatever provides the greatest amount of individual economic freedom.
And I'm still looking for a good "unbiased" source of information on government spending. I hesitate to link to a third-party news source (especially News Busters) quoting Milton Friedman from a book, however this link has a subsection that is of interest:
http://newsbusters.org/node/27813/print
My google-fu isn't strong enough at this late hour but I also found an interesting statement:
"When the economy is doing fine, he estimates, $1 of government spending yields 40 cents in extra production and related jobs." - http://www.dailyfinance.com/story/does-the-return-on-government-spending-triple-in-a-depression/19200069/
In a such a short article, there's not much meat but I'm interested in seeing any corroboration and/or rebutal to the theories at the end.
Taken in light of the Friedman statements and the basic reality of where government gets its money would seem to suggest that there IS a very small window where government COULD stimulate the economy.
However that window is smaller, IMHO, than trying to hit a two-meter thermal exhaust port. On one side (spending too early) it's wasteful and takes money from the private sector. On the other side, you end up with massive inflation.
I think the safer course of action with those odds is to leave the money with the people who know how to spend it best in their situation, the people who earned it.