With the ongoing budget crisis, there is a desperate need to conserve cash while gradually bring the state economy back on its feet. Since desperate situations need radical solutions, Schwarzenegger has pressed forward with a compulsory furlough and has shown commitment towards its implementation. 

 

The very nature of this measure is such that it is bound to be widely unpopular, especially for those working for the state and forced to take the brunt of the sacrifice. But purely from an economic point of view, there is a compelling case in favor of this measure. It helps to cut down the financial burden experienced by the state through $1.4 billion in savings. Most striking, a recent study by the San Jose Mercury News found that government growth in California had exceeded the growth in population plus inflation by a over $10.2 billion in the previous five years.

 

Apart from the economic relevance of such stringent measures, there is also strong political message that is sent across to the voters. Unless the state is willingly share its part of the responsibility with the private sector, there is bound to be more economic pain and suffering for everyone. When the economy is booming, everyone gets an equal opportunity to share in its success. By the same token, when there is an economic crisis, all workers must share in sacrifice. 

 

Some view Schwarzenegger furlough plan as a path to no where, but it has had the resounding approval of a large number of top economists around the world, many of whom have always advocated cuts in government spending and warned about the urgent need for reform.

 

Schwarzenegger has once again led from the front by going ahead with a radical measure like furloughs and taking its economic challenges head-on.