That isn't the only reason but is certainly one reason as government jobs were saved and created using he stimulus money, we saw private sector jobs dramatically decreasing. And no matter how much the government spent, the unemployment rate remained stuck.
Please explain how government job creation dampens private sector job creation if there is no additional taxes being collected to pay for those jobs. Granted the jobs are being paid for using borrowed funds, but those funds are not needed to create jobs in the private sector. Corporations are awash in cash and profits plus the funds are coming from global sources not just US corporations.