The D.C. Bubble
Washington D.C.: America's new boomtown.
Radly Balko has a fascinating, if disturbing, article up on Reason.com. It seems Washington D.C. and its surrounding suburbs have become the Hamptons south:
The new top three [richest counties in the country] are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland. All three are suburbs or exurbs of Washington, D.C.
And while foreclosure signs and fire sales litter the rest of the nation, don’t expect the capital region to suffer much in the coming years:
Investment advisers are high on D.C. area real estate even in down times, because they know the federal government’s only going to get bigger.
…
The Cato Institute’s Chris Edwards estimates that in 2005, the average federal employee made $106,579 per year including benefits, about twice as much as the average person makes in the private sector. Federal wages are also rising at about twice the rate that wages are rising in the private sector.
And that’s only counting the 300,000 or so people living in and around D.C. who draw their paychecks directly from Uncle Sam. According to Balko, 7.6 million people nationally now earn their daily bread from contractors dependent on the federal government. Tens, if not hundreds of thousands of these workers make their homes by the Potomac. Then there’s that other subspecies attached by the mouth to the body politic: lobbyists.
The Washington Post reports that the number of registered lobbyists in Washington doubled between 2000 and 2005, to nearly 35,000. Not coincidentally, federal outlays increased over that period from $1.79 to $2.29 trillion.
Remember, all this growth occurred before the Treasury Department and Federal Reserve took over our banking system and politicians started promising trillion dollar stimulus packages (not to mention trillion dollar budget deficits).
Looks like we’ve found the site of the new bubble. But what happens when this one goes pop?
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