Deep freeze

NY Times reporting the Obama administration is going to freeze federal salaries - the Washington Post is saying civilian salaries - for two years.

The unions will be enraged, the tea baggers have scored something of a victory for their version of fiscal rectitude (but will be far from placated) and the wide vista of a depression based on economic stagnation and deflation comes more fully into view. Obama is using the word sacrifice:

“The hard truth is that getting this deficit under control is going to require some broad sacrifice and that sacrifice must be shared by employees of the federal government,” Mr. Obama said at a White House news conference.

“I did not reach this decision easily,” he said. “This is not just a line item on a federal ledger. These are people’s lives.”

Are the big corporates who received the Treasury's bail-out money going to have a two year wage freeze for their executives?

He called federal workers “patriots who love their country” but added that “I’m asking civil servants to do what they’ve always done” and sacrifice for the good of the nation.

A two year freeze is a dramatic austerity measure, but it may not amount to much in the scheme of things (esp. with falling inflation expectations):

The pay freeze will save $2 billion in the current fiscal year that ends in September 2011, $28 billion over five years and more than $60 billion over 10 years, according to Jeffrey Zients, deputy director of the Office of Management and Budget and the government’s chief performance officer. That represents just a tiny dent in a $1.3 trillion annual deficit but it offers a symbolic gesture toward public anger over unemployment, the anemic economic recovery and rising national debt.