Well, of course it does, but so what? Because something benefits capitalists does not make it part of an evil plan. Far more use-value is produced than "surplus value" - has to be.
Capitalists tend the garden of the financial/ownership system and a culture which produces hierarchy as a norm, people tend the garden of the economy.
What we in fact see is Bush expanding the government and government payrolls as fast as they've ever been expanded. We should expect this because hosing down the economy with new money promotes growth. So long as the growth of government doesn't undermine the capitalist class politically, what do they care? All the merrier to print money and have a good time. So long as it doesn't inflate away the returns of bondholders, it's all gravy.
It should be clear to all by now that the argument about the size of government was a canard. Big gov, small gov, it's all financed by bondholders anyway.
The chimerical magic of the invisible flow of "surplus value" is a distraction. Who owns the capital. Whom do you have to go to to get anything started? Those people clearly have the power to set terms and over the long haul they will benefit because there is no alternative source of capital.
Not only can government money be used to pay workers who don't produce surplus value, capitalist money can be used to pay workers who don't create any value. The search for surplus value in every hour of labor is pointless. Not every player at a casino has to lose for the casino to win - they have house odds.
Forget "surplus value" exchange value is all you can put in the bank.
As for the service sector, it creates a huge bureaucracy to maintain any complex economy. It takes an even larger bureaucracy to maintain sets of rules and practices that both keep the flow of scarce capital moving and keep it moving in the direction of capitalists - enough profit to keep them in the game, not so much that you cause a crisis.
boddi