Uncle's Cutting His Tech Spending

The Washington Post's business section (9/11) contained an interesting article on the slowing pace of the federal government's technology purchases. Virginia, especially NoVA, has been riding a big horse (government contracting for technology) since 9/11. Many people would give this huge economic stimulus credit for the boom times in Virginia. (Well, not the editorial writers from the Post. They assume that Mark Warner's tax increases caused the boom.)

I've been of the opinion for some time that the rate of government contracts being let was going to slow sooner or later. Today, it looks more like sooner than later. The story was not gloom and doom, just a slowing to more historic patterns.

But now what happens? A few years ago, we had the big Internet/Telecom bust. (Of course, the accounting scandals didn't help.) Quite a few people lost good jobs. Many, but certainly not all, of the Techies moved to government contracting. There's also been great pressure to increase the number of H1-B visas to bring in more technology experts from overseas.

Many of the owners and workers in government technology also took advantage of the ultra-low interests rates and purchased bigger houses than the high schools they attended. We've seen interest rates rise, and many homes placed on the resale market. Will this problem be exacerbated by a slow-down in government contracts? What happens if both real estate and government contracting are hurting?

Our Governor and General Assembly have not exactly learned from the last fiscal mess. Spending is up way beyond population growth and inflation. Will Tim Kaine face fiscal problems during the latter part of his term? If so, will he propose higher taxes? Can a second governor con enough senators and delegates into one more tax increase? Shouldn't we all get spending discipline soon?

I suspect I'll be writing much more on this subject. These are just some initial reactions?