How Hard is it to Fire a Federal Employee?

The reason that government is a growth industry is that people are often hired, but rarely fired or laid off.

Most obviously, in the case of the federal government, this is because you can never run out of money. There's no question of profit or loss, or of not having access to credit. The money keeps flowing, so budget realities at particular agencies rarely if ever lead to layoffs.

But it is also extremely difficult to fire a government employee for cause. Some say it's impossible, others say this is a myth, and government employees are fired all the time.

Which is it?