"Contrary to conventional wisdom, raising taxes may be better than spending cuts because tax increases, especially if they are focused on wealthy taxpayers, have less of a negative impact on consumption. Spending cuts hit consumption hard, depriving the economy of money that would otherwise be spent quickly. They also have the disadvantage — so evident in the cuts proposed by Mr. Schwarzenegger — of falling heavily on the needy."
This still doesn't get us past the fact that if greater government spending stopped or averted economic downturns, then we wouldn't be very likely at all to find ourselves in one now.
Public spending cuts may "hit consumption hard," but when we are talking about borrowed money, it's better to hit it now rather than wait for it to come back and hit us later. Just ask the people who count the beans for Medicare and Social Security.
Putting the money back into private hands, even if they are "wealthy," has a long tradition of working more effectively at promoting general welfare than running it through layer after layer of bureaucratic middlemen. Continuing to pretend otherwise is an increasingly unaffordable luxury.