My understanding is that in a functioning economy, the financial market clears when the nominal interest rate is above zero. It is only when it reaches zero that a liquidity trap occurs and the government must engage in deficit spending to borrow the money pooling in the financial market and make sure it is spent.
My question is this: Why would increased government deficit spending shift the AD curve when we are not in a liquidity trap situation? Every dollar that is spent by the government will have to be borrowed from somewhere - households. This would decrease their consumption by the exact same amount government spending increases.