Lay-offs and furloughs are terrible "solutions" to budgetary issues facing all levels of government. Of course there are efficiencies that can be gained in some departments; this is true of private and public actors. But there are better ways gather revenue without destroying good jobs.
Governor Doyle, Mayor Barrett, and Scott Walker have all threatened public workers with furloughs and outright termination.
As Roger Bybee and Michael Rosen have both identified, this will depress purchasing power at exactly the time when the economy needs it the most. Laying-off and furloughing public workers will only decrease their spending, hurting more businesses and causing more unemployment.
These factors also relate nicely with an earlier post linking to a piece by James Rowen. It's easy to pile-on public workers and criticize. But suddenly when the services and amenities that public workers provide are gone, then we're complaining, "Where's the government?" Such as when we complain about garbage pick-up, snow removal, and library and park closings. The more we allow the public sector to be starved of necessary resources, the more we lower our own standard of living and the attractiveness of our communities.
Another piece I wrote linked to a New York Times op-ed by Robert Butterworth and Charles Intriago. They recommend seizing the assets and finances of the scoundrels whom have defrauded and manipulated their way to gains over the past decade-or-so bubble economy. This is a much better way to shore up public finances - by confiscating misappropriated gains.
And, as I've written about many times, an obvious route to solving budget woes is by: a) making sure corporations are paying their fair share, and b) removing exemptions and tax avoidance schemes. These few items would produce billions for public agencies.
Finally, it's time we removed the mandate that states must balance their budgets. Government entities, like any large business, have times (such as during recessions) when it is necessary to operate in the red, to continue making investments to see things through the tough times, so that there will be a bright light at the end of the tunnel.