There are two competing stories about government spending in the recession. One story says we're in a deep crisis where higher spending acts as a palliative. Another says we're in a deep crisis where higher spending exacerbates our problems. Now here's a story that helps to pit those stories against each other: Three-quarters into a year that's all about cutting spending, the Washington, D.C., is in a ten-month stagnation.

Once a bastion of economic stability, Washington, D.C., is catching up to the recession three years late. Since April, the number of employed people in the District has dropped by 9,000, according to the Federal Reserve Bank of Richmond. "The deterioration in the labor market since April is greater than the deterioration over any five-month period during the recent recession," the report finds.

During the recession and early in the recovery, Washington, D.C., and its suburbs were (relative) oases in economic conflagration. When the economy contracted in 2008, government grew steadily to assume the debts of the private sector. Cities that relied on government spending -- for health care, military bases, and business -- suffered much less than other metros.

In Part Two of the economy, however, these metro oases turned into mirages. Federal stimulus faded. State and local government contracted. The private sector hasn't picked up the slack.