I understand how monetary policy can be used to heat up an economy by increasing the money supply, but how can a fiscal policy do so? When the government borrows money to increase spending, it is not as if that money would have just been sitting under somebody's mattress; it would have been loaned to some other entity, whose spending of that money (as far as I know) would cause just as much economic activity as if the government spent it. In addition, the government's demand for money would should raise interest rates and/or strengthen the dollar, which is the opposite of what I generally think of when it comes to an "expansionary" policy. Also, while money could be lent by entities in other countries, that money would just have to flow back out in the form of more imports, so domestic AD shouldn't be affected, no?
The only thing I can think of is that the government can spend 100% of the money that it borrows, whereas if that money went into a bank account, a small portion would not be lent out due to reserve requirements; does that make all the difference?
It's been years since I took an econ class, and I know this is 101 stuff, but I can't figure out what I'm missing...