When I bought a town house on Capitol Hill in 2004, my friend and fellow conservative journalist David Freddoso suggested that I had to worry about a second threat in addition to the possibility of a future broad housing slowdown.

“But what about the fact that Republicans control the White House and Congress? They’re going to shrink the government, which will drive down demand for property in Washington,” David exclaimed.

Then we both had a good laugh at the outdated idea of the GOP as the party of small government. As an investor in D.C. property, I have taken a long position on the size of government even as every week I agitate for smaller government. Economic data continue to show that the government sector and this entire region are having a swell time even as the rest of the country slows down.

In this year’s first quarter, the federal government added 13,800 new workers while the rest of the economy lost 232,000 jobs, according to the Bureau of Labor Statistics. The job figures have received attention recently — most prominently with a USA Today article linked by Drudge — but they are not the only numbers that reflect the Beltway Boom. 

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In December 2006 — the last month for which the Census Bureau has such data — the federal payroll was $14 billion. The average government employee makes more than the average private-sector worker.

While not all government spending happens on the Potomac and not all government employees live in the Washington area, the Beltway region is the prime beneficiary of taxpayers’ mandatory generosity.

Maryland became the richest state in the nation in 2006, with a median household income of more than $65,000 — 34 percent higher than the national average. Virginia is ranked ninth, and even the District of Columbia, where 20 percent of the population is below the poverty line, ranks above average in household income.

Virginia’s Loudoun is now the richest county in America, according to the Census Bureau’s measure of median household income, followed by Fairfax, also in Virginia, and Howard in Maryland. Montgomery in Maryland is near the top of the list, as are Virginia’s Prince William and Arlington. This is the fruit of the Republican Party’s failure to curb government when it controlled all three branches of the federal government.

As columnist Terry Jeffrey put it when these numbers first came out: “The next time a liberal tells you cutting taxes is a break for the rich, tell them they have it backwards. The taxes we pay go to the rich in places like Loudoun County.” 

Powering the Beltway Boom is not simply government spending, but also regulation, tax-code tweaks and all species of federal control. Most government intrusions enrich not only federal employees, but also K Street lobbyists.

Businesses and other organizations spent $2.8 billion on lobbying the federal government last year — nearly twice the total from 1999. As government gains more control over the economy, a good lobbyist becomes worth that much more.

To a business, bigger government is more threatening, but it also provides more opportunities to pocket handouts, mandate your product or push regulations to crush smaller competition.

Signs of the lobbying boom abound. In the past few months, we’ve seen early retirements from Sen. Trent Lott, R-Miss., former House Speaker Dennis Hastert, R-Ill., and Reps. Albert Wynn, D-Md., and Richard Baker, R-La., all to become lobbyists. 

Baker now heads the Managed Funds Association, once the quiet lobbying group for hedge funds and private equity, but now an expanding (1,800 percent growth in two years) lobbying powerhouse.

Companies increasing their D.C. presence is one reason new buildings are constantly going up downtown. The region still has relatively few Fortune 500 corporate headquarters beyond the obvious defense contractors — Lockheed Martin, CACI, DynCorp and General Dynamics, for example — but the health care industry is steadily widening its footprint around the Beltway, and not because the muggy summers are good for your lungs.

Now nobody should begrudge this region its growth. Government employees are working men and women trying to make ends meet like most Americans. It’s not our fault government keeps getting bigger (not mine, at least). It’s the rest of the country that keeps electing big-government politicians.

As our deficits balloon and bigger government stultifies the economy, at least we can take solace that America’s loss is this region’s gain.