'Unemployment is Capitalism's Way of Getting You to Plant a Garden.' Orson Scott Card

Today I 'signed on' (for Job Seekers Allowance, benefits, the dole... whatever you want to call it) for the first time ever. Never have I involuntarily been out of work this long. I realize how lucky I am to live in a state which provides for me in my time of need (though apparently its going to take at least 2 weeks to process this so the £27 in my bank will have to stretch a long way). I have paid taxes and in effect I'm now going to get some of them back. But you can see how Capitalism is a slippery slope, a vicious circle, a catch 22:
I am out of work, therefore I am claiming benefits in order to afford to live, I cannot find a job, there are less jobs available now, so more people are out of work, more people are claiming benefits, therefore more taxes are spent on benefits, therefore government/civil service jobs are being cut, therefore there are less jobs around, which means there are more people out of work (and repeat).
I sympathise for the state, because I can see no way out of this conundrum, if anyone else can, then all advice is welcome! My new home: