Well the pay freeze is a good start. Next, we need major cuts to the bloated federal workforce, and privatize what remains.

I predict that if the real estate market remains stagnant in the DC/Baltimore area the pay freeze will be blamed for it.

I work for the Federal gov't, and agree that there does need to be some degree of cutting back on the work force.... However, I would caution that privatizing isn't the solution. A majority of work is already privatized in a way - - it's contracted out. I can vouch that those contractors are what is bloated. They overspend and get away with it - - the real problem is the gov't oversight, contracting, and procurement processes. These processes are unwieldy and totally inefficient. And in extreme cases we've seen that they are super corrupt (Blackwater, Haliburton). Cutting back on contracting would help - - but then those gov't workers would have to held to higher standards than the contractors who did the work before them. There is a lot that needs to be fixed -- I deal with it everyday and am routinely amazed/dismayed.

A pay freeze does nothing. Instead of increased spending, it will remain flat. You need CUTS to reduce the deficit. They can start by privatizing the postal service. They continue to lose billions of dollars every year.

The effect on housing will be minimal. People don't qualify for a mortgage based on pay increases. They are qualified on current and past two years of income. If anyone decides not to buy a home because they won't receive a 2% to 3% pay increase, they shouldn't be buying in the first place. Just more proof why home prices will continue to fall.

Since we are "freezing" Federal employees pay, will that include bankers, mortgage brokers, real estate agents and other "glorified" Federal employees who received/still receiving bailouts, stimulus and other free money disguised as low interest rates, etc? That is where trillions of Federal money and printed money went. (not to Federal civilian employees). Federal Employees pay taxes and perform a service for the people. What exactly and who do bankers, mortgage brokers, real estate agents help besides themselves?

How about getting rid of vehicle emissions for any car younger than 15 years old? How many of them fail anyway, 1 in 500, 1 in 1000? Now how much money is wasted testing the other 999 cars not to mention gas, time and pollution created to go get tested?

Federal employees make 56% more than private sector employees, when comparing the same jobs that exist in both the public and private sectors: http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm

It's a good first step, with a long way to go needed.

RE: Peter's knock on the FIRE economy. You're absolutely right, the bailouts you cite have been just as bad, even arguably worse than the Federal pay disparity. You can't justify or deflect one wrong with another however.

Finally, given that 80% of spending is entitlements, defense, + interest on the debt, and tax revenue only covers 60% of spending, there needs to be some serious cutting to these areas if there is any hope of longterm solvency.

Cut the Union ties while they are at. Cut government employees to the BARE MINIMUM. The government DOES NOT CREATE JOBS. Government employee salaries are severely bloated. Most government employees make more than the private sector now. Remember, it's called CIVIL SERVANT for a reason. Cut the MTA also. You can make that private, too!!!!

Maryland has needed to diversify its econmy for a long time. There is nothing wrong with having many Federal employees live here.But we have become completly dependent on Federal employees and the federal governemnt.

In my opinion, this has led Baltimore and Maryland to have an anti-business atitude.I dont think that they "hate" the private sector. But both the City and the State Governments tend to feel that the private sector is periphial in terms of the economy of Baltimore and Maryland.

As for Federal employees, i feel bad for them.Most of them probably work very hard.But if we are to reduce our massive debt, then everyoneis going to have to sacrifice.That means lower spending AND higher taxes. It would be impossible politically to take the drastic meaures needed to reduce our dept,without freezing Federal employees wages.

It shouldnt be seen as "punishment". Anymore then higher taxes or spending cuts should be seen as "punishment".

Sadly a lot of good Government programs will have to reduce thier budgets.And more of us will have to give the government moreof our hard earned dollars.

This will not be a good thing.But sadly it will be a necessary thing.

Those that think that cutting the deficit will be simple or painless , are fooling themselves.

It cant be done by simply taxing the rich.and it cant be done simply by cutting "Waste" in the Federal Budget.

Not sure about Balt. city, but, during the 1987-1997 period, home values in the DC metro area were stagnant and actually declined in real terms. The major factor which took the "blame" was the downsizing of the federal defense industry. Federal agencies experienced reductions in force (RIFs) and federal contracting shrank significantly as the Bush and Clinton Administrations, along with Congress, attempted to reap the benefits of the peace dividend after the fall of the USSR and actually made progress on the annual federal fiscal deficits.

The problem with an across-the-board salary freeze is that employees who were minding their own business over the years are impacted more than all the $160k hires brought in by the recent Bush and Obama Administrations from the private sector as senior managers or nonsupervisory expert analysts. During the 1980s, these types of individuals would have been brought in as consultants under contract, which is costly, but at least it is temporary. The "stats" cited by USA Today and elsewhere about the rise in "average" federal salaries over the past few years. When you have a bunch of $50,000 people, a few new $160k people can certainly jack up your average significantly.

The irony is that this high-priced hiring was in large part an effort to please the conservatives who believe that private sector experience is always better than public sector experience and have argued for decades that we need to bring more of that "expertise" into government. Now, however, they are implying these are socialist doings, while in fact most of these are former Wall Street bankers and other corporate refugees who are essentially receiving, whether it was their initial goal or not, a "soft landing" in a rough economy.

It is definitely not the case that the sharp increase in average federal salaries is due to long-time "journeymen" feds suddenly receiving a raft of generous promotions . . .

I honestly don't know how much of an impact this is going to have. It's only a pay freeze to the extent that fed employees won't get cost of living allowances (which have been getting smaller and smaller for years now), but still get their step increases, which for most happen yearly, to the tune of $1,000-2,000 each.

As far as federal employees being overpaid in general, I don't quite believe that. The higher ranks make big bucks, there's no denying that, but the average new employee is brought in at the GS-5 level, which is only around 32k a year.

Unfortunately - anyone who doesn't work for the Ferderal govt is going to say that Federal employees are overpaid. Why would they not? The fact is that for professional positions like accountants, lawyers, etc., Federal employees are grossly underpaid. It is not even close. Private employers at Big 3 accounting firms give Daddy's little girl CPA girls out of college, exoribitant first year salaries to say 1+2=3. In fact - private employers are dumb to pay their employees as much as they do but of course- that is why they all had to be bailed out (by the government!).........

It really is a shame that financial literacy is not taught in school and that the average citizen like Josh can't spend a day with a professional Federal Employee. In the meantime - keep enjoying the rich people welfare.