It’s important to distinguish between DC the seat of the federal government and DC the well-run, thriving city. One functions, the other doesn’t. But, it is important to recognize the weaknesses in the District’s economy. The number one weakness is we remain to heavily dependent on government spending as a share of our economy. 35% of the District’s economy is derived from federal and local government spending. The national average is 12%.

The shutdown will add urgency to the transition to a more balanced economy as our dependence on government workers and the boost they give the local economy is exposed. The District has more federal jobs than any other jurisdiction and will thus feel the pressure of the shutdown more than most areas of the country.

An achievable goal is to get the percentage of the District’s economy that is derived from government spending down to 17% by 2023. This can be achieved by keeping a lid on government spending, but more importantly by growing the private sector portion of our economy more quickly.

 

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