In my experience, the benefits and job security guaranteed to government workers provides no added benefit for the taxpayer. No market incentives translates to no worker incentives, and everyone is just riding the gravy train to retirement. The bureaucracratic red tape imposed by Congress builds up endlessly, and special interest groups and crony capitalists magnify the inefficiency. Most government pay systems provide raises based 90% on time served instead of performance, though the ship is slowly turning towards performance-based systems. My agency tried pay-for-performance years ago, the union shut it down, went back to GS, now they're trying performance again.

The comment was directed at the VA, there's no reason it needs to be run by government personnel for the most part. A few could be on hand to handle classified matters if necessary. People hired by the government are not necessarily the best subject matter experts, as the rigid pay structure doesn't allow offering to pay what they're worth - and more often, to pay less, as many job classifications are simply salaried too high. Maybe strictly in matters of government policy could an expert find their niche, and I'd agree be a core government competency. Most other government agencies I can think of would be better off contracted out to enact the laws set by the President and Congress, with the flexibilty of private employment pracitices.