How to model government organization hierarchies so that the list can expand and compress

[Alex Glaros]

It's like the desktop folder/directory model where you can create unlimited folders and put folders within other folders. Instead of folders, I want to use government organizations. 

Example: Let user create agency names: Air Force, Marines, Navy, Army. Then let them create an umbrella collection called "Pentagon", and let users drag Air Force, Marines, Navy, etc. into the umbrella collection. 

User may wish to add smaller sub-sets of Army, such as "Army Jeep Repair Services" 

User may also want to add a new collection "Office of the President" and put OMB and Pentagon under that as equals. 

What would the data model look like for this?  If I have a field: next_higher_level_parent that lets children records keep track of parent record, it's hard for me to imagine anything but an inefficient bubble sort to produce a hierarchical organizational list. Am using Postgres, not graph database.

I'm hoping someone else has worked on this problem, probably not with government agency names, but perhaps the same principle with other objects. 

Thanks! 

Alex Glaros