When the government hires a company to pave a road or weatherize a home, do the employes of the construction firms count as government bureaucrats or regular employees? What about the people at Dell or Cisco making computer equipment for the medical records digitization programs that I think were in there?

You do realize that most government money is spent on contracts to private firms, not on actual government employees, right?

Even with something like low income housing, money is overwhelmingly distributed as vouchers now, not via government run, government owned housing complexes. K-12 education plus law enforcement & prisons are big exceptions, of course.

If you want to argue that the average productivity of employees at Lockheed-Martin or Parsons-Brinkerhoff (of Boston's Big Dig fame) is lower than at firms like Google, well, ok, I'll grant you that.