Sequester punctures area economy’s government-dependent bubble, Washington Post, March 8, 2013

In the most complete article yet on the likely impact of the sequester, reporter Jim Tankersley examines its scope  and its effects in the metro area in this Washington Post article.  It begins:

Recent American history is strewn with examples of regional economies that grew dangerously dependent on a single industry: Los Angeles with aerospace in the early 1990s, Northern California with tech at the turn of the millennium, Detroit with auto manufacturing and Las Vegas with home building in the mid-2000s. When shocks rattled those industries, those regions bled jobs, and their economies sputtered.

None of those areas relied as much on a single source for jobs and growth as the Washington region does on federal government spending today.

This is the economic vulnerability exposed by the budget cuts brought on by sequestration. A decade of expanding federal largess has shielded the metro area from the worst effects of the financial crisis and the slow recovery. It also left the region, in investment terms, with a precariously unbalanced portfolio — heavily concentrated in a single stock, which is now falling.

“This is our spending bubble,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University. “It’s really distorted our economy.” . . .

Click here to read the rest of this comprehensive article.