It's a shell game. You piss off a guy at your Agency A, I hire him for a project over at Command B, when that contract is up in 6-12 months I sell him back to you for 2x his prior hourly rate. Squeezing salaries is like turning the thermostat up a few degrees; sure it will help over the long haul, but will it save you enough money NOW to stay in business? But I do agree that there is a LOT of glut in the civilian sector - problem is nobody has the balls to fire the RIGHT people, they just lay off the most recent / least tenured hires, thereby ensuring the lazier guy stays employed forever.
I promise you there is no more socialistic organization than the US government.
EDIT: Want to make it clear that I don't consider Tom to be on of the "lazier guys" who stays forever. We need more guys willing to haul bombs in their personal vehicles for free.