This is a time where traditional leftists have an opportunity to sell their ideas about the good that government can do better than the free market. Paul Krugman has offered the idea that has not made the rounds lately: create direct government jobs.
As a Democrat who is determined to do what's right regardless of the politics, I have to say:
Even though I am a strong supporter of a free market and the private sector. And I believe we are the greatest country on earth because of the ability of millions of individuals to develop and pursue an idea; right now there is an economic crisis that must be addressed.
Within this realm, there are countless areas where the government is suited to act where a private company wouldn't:
1. Creating and rebuilding infrastructure. This is traditional building and fixing of roads, bridges, electricity grids, etc. Spending money right now to upgrade our whole nation would put people to work, and it would be worth it.
2. Cleaning up our nation. There are many, many areas in our country that are disgusting to look at. Congress should create a program to hire people to beautify certain areas.
3. Security. We can hire people to ensure some of the most dangerous areas in the nation are safe. For example, plot out the most dangerous places in America, hire a whole new generation of law enforcement/security personell and place them on duty.
If you use your imagination, it's clear many of these government jobs would also save us money and/or improve the lives of average Americans.
If the federal government made sure the pay was reasonable but not great, it would incentivize people to look for higher paying work in the private sector, but also offer something better than unemployment or welfare.
After a certain period of time we would have a better built America and a safer country.
Of course this costs money. I would raise the national debt. I'm not one of these people who is concerned that our "debt is unsustainable". We are the strongest, best, and most good country on earth. We are the game in town. Our debt is in Dollars. We can print more Dollars anytime we want. At any time we can become self-sufficient and not trade with the world so we are really vulnerable to threats. I wouldn't brazenly flaunt the possibility of default. I take pride in the world's confidence in our market and markets. I would note that we will be able to borrow whatever we need from individuals both domestic and foreign at all times. If the U.S. can't do it, then the world will have bigger problems going on than that.
But if we do need to pay for these programs, cut spending in government areas where there is such waste, fraud, and abuse. That is in Defense, agriculture, and probably health care. After that, raise taxes on junk food and the like.
This is an ideal time to have government jobs that help fight unemployment. I advocate for the most free-market solution possible because it is almost always better to have more people thinking and deciding than a centralized few. But either way, we should fight unemployment.