George Tower, I will give you an A+ for your notion on government employees.
The fundamental problem with governement employees is that they are usually the under-achievers at university. Yes, they are probably in it for the job security, and are terribly risk averse. This then is the dillema. How does one get free-thinkers, entrepreneurs, to work in a state owned organisation. If you can find the solution, I'm sure you'll be up for the next Nobel prize.