That's just a part of it. It's basically most of the things that government does to "help" people.

Higher than market compensation for government employees is just one form of welfare, other forms being food stamps, government sponsored housing projects, public education, Medicaid, Medicare, social security, etc. Welfare gives an advantage to people who don't deserve it. If welfare did not exist, these people would either have to contribute to society through their labor (thereby improving the economy for everyone), get help through family, private charities, and religious organizations, or die.

But what we've done is make welfare super comfortable, and incentivized people to moved toward more dependence on government. Single and unemployed? Here's some money. Single and have a child? Well you'll get some more. Single and multiple children? You can have a lot more. Don't get married though, or we'll take some away. Oh, and you had better vote Democrat or those Republicans will take it away!

Add to that that the vote is given to everyone now. Originally it was just white male landowners. Society has progressed and recognized equal rights for women and people of all races. But now it's every citizen 18+, and some places are even dropping the citizen requirements. The original intention was that only people that had their shit together would be voting. It takes a certain degree of intelligence and organization to own land and maintain your ownership. You have to have saved up enough money to buy it, or have an income that allows you to qualify for a mortgage. And then you have to pay property taxes and the mortgage on it to keep it. Most Americans, especially liberals, lack the ability to do this. They move from one temporary pleasure to the next with little thought to the future.

So we have a society that takes care of idiots, encourages dependence, and promotes degeneracy. And we allow these people to have equal voting rights as Patriotic Americans who actually contribute to society instead of leeching off of the government teat.

That's what's killing us.