Ask HN: How do you think the current economic climate will affect US startups?

I'm currently employed in the DC area, which will arguably be one of the hardest hit by the sequester. The local defense contracting industry is going to take a hit, likely increasing competition for local software positions. This is probably great for those looking to hire some decent talent, but will increase competition for open positions.

How does the current economic climate impact the US startup scene? Is this going to boost the industry due to the new labor entering the market? Will the economic uncertainty cause investors to tighten their purse strings?

I'm eager to hear some outside input, since the Beltway definitely has a feedback loop.

TLDR - Sequester: opportunity, or setback?