..... I have no doubt that your statement is completely accurate. But my guess is that you and your colleagues at YPG are probably somewhere in the 90th percentile group in terms of education and skill sets. The question in my mind is what proportion of our 2 million-odd (?) federal employees possess training and skill sets that command compensation so substantially greater than that offered in the private sector? one in twenty? one in fifty? one in a hundred? How many post graduate degree holders work at Fannie Mae sorting mortgages for instance? With the AVERAGE federal employeee compensation DOUBLE that of the private sector, statistics inescapably suggest (to me at any rate) that the lower end of the federal employee spectrum is very well compensated indeed.
A big problem, often noted by astute observers, is that all the incentives in the government are inverse of those in the private sector. In the private sector, there is great incentive to keep wages down and productivity up. There is great incentive to save money. As has been often noted, in the public sector the incentive is to spend money and move wages higher. Productivity is hard to measure, as there is no market discipline.
I do not have the answer to this, but eliminating entire departments seems to be one thing that works.