The Federal Job Machine

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There have been times, especially during the late 1990s tech boom, when some business folk in the area thought they had outgrown their rich uncle. But their post-2000 experience, when other tech centers floundered but northern Virginia boomed, taught them otherwise. "You had your stable base coming from government contracting, and then you had this explosion around telecom, IT and the Internet," explains former Virginia Governor Mark Warner, who was a co-founder of Nextel and later a venture capitalist. "Then, after the bubble burst, you had this unfortunate need to build a homeland-security industry."

So for the past half-decade, the strongest regional economy in the nation has been fueled by demand not from Internet-addled, cell-phone-addicted consumers but from government drones charged with keeping us from getting blown up. This is great for northern Virginia. It's less reassuring for the rest of the country.

At the end of January, President George W. Bush labored to make the case that the economy is "strong," using the word eight times in one speech in Peoria, Ill. In terms of the basic indicators of economic growth (now 3.5% annually) and unemployment (4.6%), he's right. But when you consider that 2% of current U.S. economic activity is the product of federal deficit spending and more than 6% is paid for with money borrowed from overseas (there is overlap between the two), strong doesn't seem quite the appropriate word. The bill is coming due--although probably not in northern Virginia, where federal spending is forever.