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March 11, 2010

Analysis of Wealth of Those Living Around Washington DC

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Six of ten richest counties and twelve of the top 25 richest counties are around Washington DC

http://www.washingtonian.com/articles/coverarchive/1933.html

Between 1980 and 2005, the government’s spending in Washington escalated from $4 billion to $52 billion.



Loudoun county in 2006 had 183,900 "everyday millionaires" whose net worth is between $2 million and $10 million;

24,887 "Rich But Don’t Know It" types who are worth between ten and fifty million;

7,200 "really rich" who are worth between a hundred and five-hundred million annually; and

about 500 "tycoon rich" lobbyists, lawyers and owners of contracting firms whose net worth was nearing a billion.





The key is not the number of federal employees. (although there are a large number of high salary government jobs) Someone can make a lot of money when functions are spun out from government agencies and they have a company which the government pays to do the work

What about contractors? New York University's Paul C. Light estimates about 7.6 million people earned their paycheck through federal government contracts in 2005, a 50 percent increase since 2002. That increase in contractors doesn't seem to be trimming the number of full-time government jobs, either. The civil service workforce increased over that period, too, though not nearly as dramatically. Taxpayers paid $400 billion to federal contractors in 2007, double what they paid in 2000. Less than half those contracts were won with competitive bidding.

And lobbyists? The Washington Post reports that the number of registered lobbyists in Washington doubled between 2000 and 2005, to nearly 35,000. Not coincidentally, federal outlays increased over that period from $1.79 to $2.29 trillion. The government put more money on the table, so firms were willing to pay more lobbyists higher salaries to go snatch a piece of it

As for federal employees, according to the Bureau of Labors Statistics, as of January 2007, there were 284,000 federal employees living in the Washington, D.C. area, up from 268,000 in 2000. The Cato Institute's Chris Edwards estimates that in 2005, the average federal employee made $106,579 per year including benefits, about twice as much as the average person makes in the private sector. Federal wage are also rising at about twice the rate they are in the private sector.

Share of GDP for the US and Loudoun County from Government Contracts

In 2000, the US GDP was $9.8 trillion and $208 billion was federal spending on all government contracts. 2.1% of the economy. $160 billion on defence or 1.64%.
In 2007, the US GDP was $14.1 trillion and $457 billion was federal spending on all government contracts. (figures from fedspending.org) 3.24% of the economy. $312 billion on defence or 2.2%.



There are websites for searching government contracts awarded by county

Loudoun county economy was $8 billion in 2000. 0.511 billion or so of that from defence contracts alone. (6.4% of the county economy in 2000 from defence contracts. Four times the national average.)

In 2007, Loudoun had a gross county product of almost $16 billion for a population of 285,000 $1.72 billion in defence contracts (10.75% of the county economy in 2007. Five times the national average.)

The dependence on defence contracts could reduce. Say you had started your company in the 1980s or 1990s. Initially you could have almost all of your business from big government contracts, but then over time while that might still be a significant business you would diversify and win as much non-government business on top of your original government work.

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