Why couldn't they find other work? is it the role of government to create jobs? Fuck no. There's nothing wrong with expecting people to be responsible for themselves.
Large cuts to government spending would kill government and government contractor jobs. Millions of jobs would be lost. Tens of millions of people would save a ton of money, and would have more purchasing power. The people who lost their jobs could go into the markets that would inevitably grow with the increased spending power, or they could start their own companies.
I have stated the reason for smaller government, increased freedoms. You have more personal and economic freedom when government gets out of your way. People should stop being so reliant on government (and other people's money), and do things for themselves.