Comment by thaumasiotes

> For the government, giving those benefits is definitively a much better deal than using a contractor.

This is not necessarily the case. The large part of the benefits are to be paid in the future, and this makes it possible for the government to spend much more than makes sense on whatever the project is that the employee is assigned to. You can get into situations where the employee doesn't pass a cost-benefit test.

The contractor is less cost-effective; you get less work per dollar spent. But because you have to pay for the contractor at the same time they do the work, you aren't subject to this effect of being trapped by an illusion of cheapness.