Public sector lay-offs are not justified.
Public sector is not a business. They provide essential services. They include schools, law-enforcement, health care, infra-structure maintenance.
It is not a good. It makes the economy worse. It also make the private sector worse. Public sector lay-offs affect small businesses too.
The solution is to increase taxes on the wealthy corporations and individuals. Close their tax loop holes. Taxes are based on income. The wealthy ones in the US already pays too little taxes.
GE did not pay any taxes for the last two years.
In 2010 they made $14 billion in profits and we had to pay them $3 billion in tax credits.
The most profitable company Exxon Mobil did not pay any taxes in 2009 while they made $19 billion dollars in profits.
Instead of paying taxes they took $156 million in tax rebates from other tax payers like you and me.
Chevron made $10 million in profits in 2009 but took a refund of $19 million. Imagine, we had to pay them again after we have painfully paid them at the gas pumps.
These oil companies also took $6.2 millions in tax subsidies from our pockets. There is more and I could go on and on,
Our politicians, mainly Republicans, have millions of dollar of bribes from these oil companies to protect their corporate interest.
These are only a few examples of how large companies pay no tax or pay too little tax. In fact, they burden us by having their tax credits and cause lay-offs in the public sector
If corporations can maximize their profits, why can't our government increase our tax revenues from these wealthy groups.
There is simply no justification to lay-off public sector employees so that corporations can walk away with billions.
Please read my hub of Government Spending and taxes during recession.