Let me use an analogy here. Suppose you are the coach of a pro sports team. One of your star players comes to training camp out of shape and having gained 15 pounds, and on the first day of practice he slightly tears the meniscus in his knee. Clearly, the best course of action would be to first repair his knee, then after his knee has healed get him back into shape. It seems like the Republicans, however, believe that it is best to immediately get him back into shape and pray that the knee doesn't get any worse. Major budget cuts certainly won't help employment, and they might make it worse. Is it really the right time to start making deep budget cuts?
Of course, the question that remains is how to fix private-sector unemployment. I can think of a few possible ways:
- Cut corporate income taxes, while closing loopholes.
- Eliminate some of the regulations that are most burdensome and expensive for businesses.
- Declare a one-year payroll tax holiday, or eliminate it altogether (since the payroll tax is basically a tax on hiring).
- Implement a tax credit or subsidy for buying American goods.
- Invest in maintaining American infrastructure (which the 2009 stimulus somehow failed to do).