General Dynamics, based in Falls Church, said it was devaluing its information technology business by $2 billion amid falling government demand. The announcement was particularly worrisome because IT contracting is the key ingredient to the metro area’s government-powered growth.
Information technology appears to be
one of the first segments of the private sector to sustain tangible damage from
federal budget cuts — because it’s easier for the government to stop rewiring
offices than it is to stop building a ship or a tank.
The region’s dependence on
government IT, and contracting in general, makes it particularly vulnerable to
the spending reductions put in place by President Obama and Congress over the
past two years. Government procurement spending in the area grew by double
digits from 2000 to 2010. In 2012, it shrank by 5.5 percent.
There’s a certain symmetry to the
timing: All that federal spending pushed the Washington region to the top of
the list of major U.S. metropolitan areas for job creation after the Great
Recession, and it helped fill office parks along the Dulles Toll Road and
elsewhere with well-paid white-collar workers.
Now, as growth is slowly picking up
in many other cities, federal budget-tightening is dampening the economic
outlook here. Read more here.
But, what would you (General
Dynamics) expect to have happened when the Federal Government cuts back, across
the board, on its spending initiatives?
Did GD really think that everybody else should be cut back but
them? Of course, that would be a
Republican world; a world in which the common man and the middle would have to
“suck it up” so that business and industry could prosper and survive and grow. Everybody wants the Government to spend less
until it is time for them to be pulled off the teat.
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