IANAE, either, but it seems like what Pelosi was saying was not all that unorthodox. Of course, one can find any number of economists saying any number of things, but my understanding is that this school of thought is supported by several bodies whose opinions ought not to be dismissed out of hand.
The nonpartisan Congressional Budget Office suggests that a policy that targets those whose consumption is limited by income (which could include reducing payroll taxes or refundable and non-refundable tax rebates, as well as increasing unemployment benefit and increasing food stamps) could have positive effects on output and employment per dollar:
TL;DR? They produced a table which put 'increasing aid to the unemployed' as the sigle most effective means of doing so:
The Economic Policy Institute produced a not dissimilar table, based on the testimony of Mark Zandi (Moody's Economy.com chief economist and a former adviser to John McCain):
"As money is spent, it creates beneficial ripples through the entire economy. The evidence is that most of the money from the recent tax rebate was saved rather than spent, thus blunting its stimulative benefit.1 By comparison, other options—such as infrastructure spending, aid to states, food stamps, and unemployment insurance (UI) benefits—are much more cost-effective because they target the needs most likely to channel money back into the economy. Mark Zandi from Moody’s Economy.com estimates that each dollar of refundable tax rebates only boosts GDP by about $1.26, while each dollar of infrastructure spending could provide a $1.59 boost. Not only are many of these stimulus options more effective, but they also have the added benefit of assisting those hardest hit by the downturn and tackling long-standing infrastructure needs that would lower transportation costs, decrease traffic, and increase business productivity."
Ralph Martire, Executive Director of the Center for Tax and Budget Accountability agrees:
"most deficit concerns being raised are motivated far more by politics than any desire to pass good policy. So much so that facts are being intentionally distorted or ignored while fiscally immaterial, short-term initiatives are wrongly being castigated as creating material, long-term issues. Nothing illustrates this deficit folderol better than the debate over whether to extend the time period for claiming unemployment insurance benefits...
In May 2010, the private sector created only 41,000 jobs. That’s 72,000 less than what’s needed to keep up with the demand generated by natural work-force growth, much less creating the positions needed for the unemployed to find work. No one’s thumbing a nose at getting hired to live in luxury eating government cheese — there simply are no private sector jobs available.
Perhaps the hawks have forgotten that consumer spending accounts for more than two-thirds of the nation’s economy. The best consumers are low- and middle-income folks, who don’t earn enough to save, so they spend their paychecks. That is, when they have paychecks. See, if they’ve lost their jobs and the private sector isn’t creating jobs and the feds cut off unemployment benefits, their ability to spend drops to, well, nil. Which is why the amount of private sector economic activity stimulated by unemployment benefits is greater than any other fiscal action government can take. In fact, dollar-for-dollar, it’s five times more stimulative than the Bush tax cuts."
I think the suggestion that everyone becoming unemployed and getting food stamps to drive stimulus is facetious nonsense: this is about what to do with those who are unemployed.
As I said, I am not an economist, but doing a bit of research (links provided) has given me something to think about in this regard.