Big infrastructure project don't work in this day and age. The recession would be long over before the environmental impact reports are even submitted, and you'd need to repeal Davis-Bacon to make things affordable.

But some variant of the New Deal approach would be possible. For instance, instead of paying people not to work for 99 weeks (as we currently do), we could pay people wages equal to unemployment benefits for jobs that would otherwise be done by a unionized government employee. For instance, unemployed skilled workers could become DMV clerks and unemployed unskilled workers could become DMV janitors.

Such an approach would allow us to both create jobs and cut spending. Strangely, we don't go down that route. It's almost as if our elected officials and unelected bureaucrats aren't looking out for our best interests.

> The recession would be long over before the environmental impact reports are even submitted

For megaprojects where a municipality might be creating new infrastructure or modifying infrastructure, sure. But there are plenty of big projects involving deferred maintenance that would require little or environmental impact work (or may have even had the environmental work done long ago).

what would the ex unionized government employees do then?

Become employed doing low-wage non-unionized government work, same as the private sector unemployed. The government can produce more for less money.

Of course, this assumes that producing services is the government's actual goal. If funneling money to cronies (politically connected corporations, government unions, etc) is the goal, then this method won't accomplish that one so easily.

Get jobs that actually help the economy. The government can't add jobs to help the economy by definition, because they don't work in the realm of profit/loss. This is called the economic calculation problem. We've ignored this problem, and that's why we keep creating jobs from stimulus while losing twice as many as created.

Huh? Aren't government employees paid in the same currency as employees in the private sector? Don't those employees spend that currency largely in the private sector? If those people wouldn't otherwise be employed, how are their jobs not "helping the economy"?

You are propounding the Broken Window Fallacy. To discover the flaw in your reasoning see:

http://bastiat.org/en/twisatwins.html

It looks to me like this is only a fallacy on the assumption that government employees are like glaziers fixing broken windows: absorbing value that, but for a loss, could otherwise be put to another use. It is that assumption that I meant to question, though I see I did not express the point adequately.

If you wish to question such an assumption, you need to show that government employees produce something of value, not that they consume something of value.

I think the people at the DMV produce something of value. They limit who's allowed to drive making the roads safer. That is extraordinarily valuable.

"Then why not use spoons?"

http://quoteinvestigator.com/2011/10/10/spoons-shovels/