The higher the cost of government services, the less the amount of services.
Not if salaries become so low as to be uncompetitive with the private section, in which case you get people not qualified to do their jobs.
True, but at the moment, public sector employees make about 40% more or something vis a vis private sector equivalents on average, with a lot more job security. When it flips the other way, get back to me.
It's funny how widely studies differ on this subject because of number massaging on both sides. Everything I've read says that public sector employees are dramatically underpaid compared to private sector employees based on their level of education.