D.C. Needs to Open Economy to Entrepreneurs
Anticipated federal spending cuts could have serious repercussions for the Washington region.
Anticipated federal spending cuts could have serious repercussions for the Washington region. George Mason University Economist Steven Fuller recently told the Metropolitan Washington Council of Governments that projected cuts could reduce federal spending from 40 percent to 36 percent of the area’s annual economy, leading us back into recession.
This shows the hazards of an economy being too dependent on one industry and also on federal money. To avoid such shocks, policymakers should encourage diversification. Keep your economy open to entrepreneurs by letting them decide what businesses and industries are most like to thrive in the DC area. Policymakers should keep the playing field level for businesses. Keep tax rates low and the tax base broad, and avoid imposing burdensome regulations. That will go a long way to making sure the local economy is diverse and vibrant.