I'd argue that this is good for the economy. Economies are strong when money is changing hands a lot. If people hoard all their pennies, then money isn't changing hands, business isn't growing, and the economy stagnates.
If you really just want to inflate the amount of money being spent, there's always room for more rent-seekers and debt collectors.
Only that, the holes are very elaborate. (Like perfumes or stupid shit like a metric crap ton of TVs nobody uses anyway because we are busy staring at a much smaller screen in our palm.)
The problem here, as with any economic ideas, is properly defining "stupid stuff". Value has to be defined on an individual basis. If someone gets more entertainment from digging holes and filling them with dirt than using their phone, then hole digging doesn't seem like such pointless endeavor. The hole digger will probably end up in better health than the phone user, too, so it's not like there endeavor is altogether pointless.
Taking options away (like cash) is a bad idea if you're optimizing society around individual autonomy. We should want as many options as possible.
If the average person didn't spend too much money on things they don't need, we'd have very high unemployment. The people with jobs might feel better and less stressed but a huge number of people would be extremely stressed and despondent.
It may sound obvious when I put it that way, but it seems to me that many times the political or economic proposals I hear fundamentally disagree with this goal.
Resources that are wasted on stuff that we don't need is directly taken from other better places that those resources could have been spent on.
By not spending now, we are instead able to spend those resources on the future.
The vast majority of people have skills and are employed in areas other than housing, food, transportation, healthcare, clothing, and education. What would they all do in a world where nobody bought massages or luxury vehicles or hair dye or designer clothes or airplanes or tasting menus?
Would you have all the artists and marketers retrain as farmers and green energy researchers? Would people really be happier in this hypothetical ultra-efficient future of such limited career choices?
People misinterprete it to this basterdized version a lot though.
The real Keynsian model is that we should spend more in bad times and LESS in good times to even out business cycles.
People always forget that second part...
It was NEVER about spending for the sake of spending or wasting money on things that we don't need to help the "economy".
People misinterpret it to the point where they believe the economy is some infinite motion machine, where you ad more motion and even more motion comes out.
It was always about business cycles, IE SAVE money in good times, so it can be spent in bad times.
That's an axiom, not a fact.
Or rather, it only becomes a fact when people want X and Y and Z out of the economy (e.g. constant growth) over other values (e.g. avoiding environmental externalities, non-shopping-related quality of life, stability, equality).
That could hypothetically be a good thing, invoking my inner Milton Friedman, if those on top then use that groundswell of 'free' money to then reinvest in their business and everybody moves upward. However in this case, as opposed to general supply side economics at large, you need to show that that subsequent trickle down is more beneficial than what was removed from those at the bottom. I think that's going to be improbable, especially as the merit of supply side economics itself becomes ever more debatable.