I have and economy question?

ok so everyone is saying and believing the government when they tell us that are economy is so bad and stuff and we shouldnt being spending all our money and people are getting laid off of jobs and such an such. but my question is with people getting laid off companys closing down or cutting down on hours or whatever isnt that screwing up the economy itself? i mean if you fire people or layoff people they will ask for unemployment which then mean the government has to give them money and also if the more people that are unemployed the less business more and more companies will get cause people wont have jobs to buy stuff. so what im trying to find out is.... is there really a such world that we live in that we have to believe that we live in a bad economy just cause of what the goverment tells us? maybe they should stop firing people and start hiring more people and see what happens?more people with jobs the more money people will have to spend on stuff i mean its common sense so yea. if someone can explain this to me in simple turms i would really appreciate it.