Then there's a downturn, profits are down, people are getting laid off, no bonuses are paid and because these things are taxed as percentages, tax revenues are down. But your public sector workers demand to be kept in the style to which they have been accustomed, and the money has to come from the government's "real" spending.
Then the next cycle rolls around, and every time the public sector ratchet up their pay and benefits a little more, until eventually that's all the government can spend money on. There is a very good case that people employed by the government, should not get a vote, because they cannot be objective.
Hell we have started doing DNA testing for Robbery's.
In America, public workers took pay cuts for the past 5-6 years since the federal pay tables were frozen (not increasing for inflation, so spending power decreased) and mandatory health care costs went up!
In America, I haven't seen any evidence of public sector employees (the public sector is huge, NASA engineers, Air Force pilots, National Park Rangers, etc) 'demanding' more pay. The only thing I've seen that can be categorized as evidence of this is top tier engineers leaving NASA & FFRDCs to work in the private sector. Not once have I seen a NASA employee go "We successfully lobbied Congress for more pay!".
I worked at a federal park, and every year employees would damage equipment, and throw it into a dumpster. Why, so they could get money to buy new equipment the following year.
My county is loaded with professional grant writers. You would be amazed at what a 501C3, and a well written paragraph will get an organization. I would list off some rediculious examples, but afraid I might expose my identity, or hurt low level employees who don't benefit from these grants.
I still think about those two companies, one was Dick Cheney's former stomping ground, who literally got more money, the more they spent. It was an open ended contract? All they needed to show was receipts, and they were paid?
So, I expect the government to spend tax money, but not throw it away.
I am no angel, but in the last two decades I see a complete lack of morality in too many people. It's almost like, "Hay, it's not illegial, so I feel fine doing it!" Maybe it's always been there, and I was naieve?
Yet when the problem is corruption and lack of oversight, you can't fix that for free, and more money can lead to more opportunities for corruption. Which is why I feel it's so important to build AI's that can detect and manage this stuff.
Adding rules, regulation and loopholes that will only be read by a low level data-entry clerk and their new Artificial Intelligience.