Cutting pay or cutting people?

The European Union wants Greece to reduce its runaway budget deficit by retrenching tens of thousands of workers in the public sector. They must be thinking that it is better to piss off a percentage of the voters (those who will lose their jobs), while allowing the rest to enjoy an ill-affordable level of pay. This is so terribly wrong. I think the right and decent thing to do is for all the public servants to receive a pay cut, with those on then highest bracket getting a proportionately bigger cut. In this way, nobody has to go hungry.

Unfortunately, the idea to cut the number of employees and not the level of pay, seems to be prevalent in the Western countries. Just watch what the U.S. and some other European countries are going to do in the next few years.

Civil service should be used as a buffer for employment. When unemployment runs high, the government should create jobs such as in maintenance and new infrastructure projects, or even cleaning the loo or sweeping the streets (for those incapable of doing anything else). Pay could be kept low until the country prospers again. Instead, governments nowadays play the private sector role. They remunerate their employees the same way as in the private sector AND retrench them in the same way too. So what happens to the government's duty as caretaker of the citizen's welfare?