How could federal spending theoretically stimulate the economy

by creating jobs so that people would have money to spend

Explanation:

In fact, it is theoretically possible that an increase in federal spending will stimulate the country's economy. The point is that government is a large entity, and by increasing its spending, it can stimulate the demand for goods or services, which will generate more jobs and heat up the economy. This generates an increase in production and, consequently, in tax collection. If this revenue gain is greater than the initial rise in spending, government accounts could improve.