^NOTE: THIS IS NOT REALISTIC
The outsourcing of local (and national) government has been going on for some time. The current anti-union, anti-public employee winds, however, seem to be leading us ever closer to a government-by-contractor.
Costa Mesa, Calif. has laid off half its staff and will outsource essential services such as firefighting. Providence, R.I. has essentially changed its school system into an independent contractor system, by laying off all its teachers. On a federal level, independent contractors fight our wars and deal in our intelligence secrets.
Outsourcing to private contractors is all fine, so far as it goes. Yet, many of these cost-cutting measures end up being more expensive in the long run. Contractors are more subject to industry capture; no lobbying rules govern contractors. Similarly, contractors do not have the same kinds of accountability as public employees.
Outsourcing certain services often makes sense, particularly when specialized industries already do a better job. Unfortunately, outsourcing for the sake of outsourcing generally leads to massive blunders. Besides, the government is often employing the specialized people who are good at these jobs (private industry has not proven itself more efficient at educating children or operating highways than governments). And yet, this seems to be a general trend inside and outside of government, with consulting industries booming and traditional businesses trying to shrink their workforces.
If the right-wing dream of Contractopia arrives, will people be any better off? If current trends are any indication, I doubt it.