The government's unemployment report Friday could hardly have been worse:

a jobless rate at 6.5 percent, highest in 14 years and higher than the 6.3 percent economists had predicted; 240,000 jobs lost in October, marking the 10th straight month of payroll reductions; 1.2 million jobs up in smoke so far this year; and more than 10 million people out of work.

Congress, of course, is wringing its hands and gnashing its teeth, as well it should. What matters, however, is what lawmakers do. Will they actually help the economy, or approve some kind of stimulus package that has the unintended consequence of doing more harm than good?

House Speaker Nancy Pelosi says the government must act quickly -- that the nation can't afford to wait for Barack Obama to take office in January. She's suggesting a two-pronged approach:

Call a lame-duck congressional session to work with the Bush administration in putting together a $60 billion to $100 billion stimulus package before the holidays.

Then follow up with another stimulus package in January, after the new president and Congress are sworn in.

We appreciate their concern and responsiveness, but the thing is, government stimulus packages can have a beneficial impact only if they are done the right way.

The cost of past and current rescue plans for banks and the collapsing financial system will run this year's federal deficit to about $450 billion; it could exceed $750 billion next year, adding yet another trillion dollars or so to the ever-growing trillions in national debt.

At least for now, Pelosi is talking about tax cuts in January's stimulus package, not tax increases -- and that's a good sign, though it could depend on where the tax cuts come from. A 10- to 20-percent cut in corporate taxes could do wonders for the economy and job growth. But we doubt that's where she's going.

Pelosi's stimulus packages might accomplish something good if they're carefully targeted to the right industries with proper taxpayer safeguards. Another round of sending "stimulus" checks to everybody, as was done earlier this year, won't accomplish much; it wasn't much good the first time, so why would it do any better the second time?

More importantly, the first $150 billion stimulus package was not offset by cuts elsewhere in the budget.

That, too, was a mistake. For every extra dollar spent on stimulus, there should be at the very least one dollar cut in spending. It shouldn't be too hard to find waste in a federal budget that exceeds a trillion dollars every year.

Curbing costs and reining in deficits would do just as much, if not more, for the economy and jobs as any stimulus package. The best medicine to recover the economy over the long term, and for a longtime, would be to get costs of entitlement spending and expensive government medical programs under control.

We doubt Speaker Pelosi and her strengthened congressional majority want to go there either.

What a shame.