Simple. Government borrows and takes up exceptional expenditures (the so-called multiplier effect). But far from stimulating anything, people seeing troubles forward increase their savings rather be back at spending / borrowing.

This gives more margin for the government to run huge deficit with the newly abundant resources, but the more it seems obvious it doesn’t work, the more government borrows and people increase their savings. The net result is a tremendous increase in public debt and government sponsored business and less private debt/activity, until the government ultimately goes broke.