Going Broke on Purpose: The Bipartisan Budget Scam

A couple of years ago, I went to a meet and greet with one of my city council members. I like this person. They're a good representative, sharp on zoning law, responsive to constituents, genuinely trying to do right by the community. They also have a graduate degree in public policy from an Ivy League university. This is someone who went to one of the most prestigious schools in the country specifically to learn how to run a government.

The city was staring down a budget deficit. The conversation was about layoffs, and you could tell it was weighing on them. These weren't abstract line items. They were talking about real people they'd have to let go, people they knew were good at their jobs, people the city needed. They understood what losing those employees would mean for the people being fired and for the government's ability to function. They told me, plainly, that there was no way to fund these jobs without raising taxes. And raising taxes wasn't an option for entirely valid reasons. So they were going to fire people. Not because they wanted to. You could see it bothered them. But in their mind, the math was the math and there was nothing else to do. So I said something that I thought was pretty unremarkable. I said, you know, there are ways to generate revenue that don't involve raising taxes.

They looked at me like I had two heads.

They weren't hostile about it, and they weren't dismissive. They were genuinely confused. As if I had suggested the city could fund its operations by wishing really hard. And I realized in that moment that the problem isn't corruption or stupidity or laziness. The problem is that an entire generation of public officials has been educated inside a framework that cannot see the most obvious solution to the problems they face every day.

An Ivy League public policy program produced someone who is excellent at managing scarcity and completely blind to the possibility of generating abundance.

The framework is simple and almost everyone in American politics accepts it without question: government collects taxes, then decides how to spend them. The conservative version says collect less and spend less. The liberal version says collect more and spend more. But both versions agree on the underlying premise that government is a cost center. A thing that consumes money. The only debate allowed is how much.

Almost no one in mainstream politics is asking the obvious follow-up question: what if the government generated its own revenue? We already do this in dozens of ways across the country, from state-owned banks to public utilities to municipal broadband, and it works. But the politicians making budget decisions act like these examples don't exist. They treat tax collection and redistribution as the only tools in the box, and when taxes aren't an option, they shrug and start firing people instead of looking at what's already working in the next state over.

Public enterprise stays off the table for a reason, and it has nothing to do with whether it works. Every major policy school, think tank, and donor network in the country has spent forty years training officials to think of government as a cost center. They look at a housing crisis and propose a tax credit that flows through private developers instead of just building public housing. They respond to the healthcare crisis with a law that requires you to buy insurance from the same companies causing the crisis. The intentions are often real. The results still end up in the same corporate accounts. Every dollar of non-tax revenue the government generates is a dollar that doesn't flow through the privatization pipeline, and every public service that operates at a surplus is proof that the entire model is a choice, not an inevitability.

Consider what we've normalized. Your city collects taxes from you, then pays a private company to pick up your trash. As of 2024, municipalities handle only about 12% of waste collection revenue in the United States.1 The rest goes to private companies, and the biggest player in that space is Waste Management, Inc. In 2024, WM's CEO Jim Fish took home $17.1 million in total compensation.2 The company spent $840,000 on federal lobbying that same year3 and has received over $32 million in corporate subsidies from state and local governments.4 WM's workers, meanwhile, are paid significantly less than their public sector counterparts. Your tax dollars are subsidizing a company that pays its CEO $17 million, lobbies to keep public options off the table, and delivers worse outcomes for workers and communities. That's the model. And waste collection is just one example.

Multiply it across every sector the corporate donor class has managed to privatize: private prisons, private military contractors, private health insurance, privatized utilities, charter school management companies, outsourced IT for government agencies, and the entire consulting-industrial complex that charges the Pentagon $436 for a hammer5 and then lectures the public about fiscal responsibility. I watched this happen in real time in the Air Force when they privatized our dining facility. The food got worse, the rules got stricter, and the government ended up paying more for a worse product, which is the entire privatization model in miniature.

The money always flows in one direction: out of your pocket, through the government, and into private balance sheets. And sometimes the government doesn't even bother with the middleman step. In huge parts of the country, your local government granted a private utility company an exclusive franchise over your area. And to be clear, the monopoly itself isn't the problem. Electricity is a natural monopoly and it makes sense for one entity to run the grid. The problem is that the government handed that monopoly to a private company instead of operating it publicly. The government created a legally mandated private monopoly over a basic necessity and then put a regulatory commission where roughly a quarter of commissioners have utility or fossil fuel industry backgrounds6 in charge of making sure it stays "fair." A publicly owned utility would also be a monopoly, but it would be one that's publicly accountable, doesn't hand its CEO a $20 million bonus, and doesn't siphon revenue to shareholders. The difference between a public monopoly and a private one is where the money goes when you pay your bill.

And when you point out that it doesn't have to work this way, they look at you like you have two heads.

The United States Postal Service is perhaps the most damning example of what happens when public enterprise works too well for the wrong people's comfort. For over two centuries, the USPS operated as one of the most successful public institutions in human history, binding together a continental nation, delivering to every address regardless of profitability, and employing hundreds of thousands of workers at middle-class wages. And it funds itself almost entirely through the revenue it generates selling stamps and services, not through taxes. The USPS is living proof that government can operate a massive, complex enterprise, do it well, and make money doing it.

Which is exactly why they tried to destroy it.

In 2006, Congress passed the Postal Accountability and Enhancement Act, which required the USPS to pre-fund more than 50 years of retiree health benefits, front-loaded with payments of $5.4 to $5.8 billion annually in the first 10 years.7 No private company in America has ever been subjected to a comparable legislatively mandated pre-funding requirement. No other government agency has either. It was a financial anvil dropped on an institution that was turning a profit, designed to manufacture the red ink that would justify privatization. And it worked exactly as intended. The USPS began reporting "losses," and the same people who had voted for the anvil started pointing at the bruise and saying, see, government can't run anything.

And the USPS is still standing. Despite decades of deliberate sabotage, it's still delivering to every address in the country, still employing hundreds of thousands of workers, still functioning. That resilience alone should tell you how strong the public enterprise model is. They threw everything they had at it and it refused to die.

For years, UPS and FedEx relied on the Postal Service to handle last-mile delivery in residential areas because it wasn't profitable enough for them to do it themselves.8 They used the public infrastructure when it suited them and lobbied to dismantle it when it threatened them. That's not a free market. That's parasitism.

Then there's the Bank of North Dakota, which has been publicly owned since 1919 and which most Americans have never heard of. BND partners with local community banks rather than competing with them, funds public infrastructure, and weathered the 2008 financial crisis without a bailout while Wall Street was on fire. Its profits go directly to the state's general fund. In 2024, it reported net income of $200.4 million, with $10.8 billion in total assets and an A+ credit rating from Standard & Poor's. Since its founding, the bank has transferred more than $1 billion in profits to North Dakota's general fund and state programs.9 That is over a billion dollars in state revenue that North Dakota didn't have to tax a single resident to get. No shareholders, no executive bonus packages, no lobbying budget. Just a bank doing bank things and sending the money home. And when the state faced a $43 million budget deficit in the early 2000s, BND kicked in $25 million to close the gap, reducing the need for both spending cuts and tax increases. There is no reason any city in America can't do some version of this. They could build public housing and set a floor for housing costs instead of letting the private market set a ceiling. They could operate a public bank that funds infrastructure and returns the profits to residents. They could fund social safety nets with revenue from services the government already provides well. The tools exist, the models exist, and the results are public record. So the question for every local official in the country, including the ones I like and respect, is simple: get on board or get out of the way, because the next candidate will.

The Alaska Permanent Fund takes oil royalties and invests them so effectively that every eligible Alaska resident gets an annual dividend check. The state literally pays its citizens instead of taxing them, and it does this through public ownership of natural resources and competent fund management. Alaska's publicly managed oil fund has been cutting checks since 1982,10 and somehow the free market hasn't collapsed.

Municipal broadband networks consistently offer lower prices than private ISPs.11 Public utilities that haven't been privatized deliver cheaper residential electricity than their for-profit counterparts.12 State-owned liquor stores generate billions in revenue across more than a dozen states, funding schools and infrastructure without tax increases.13 About 60% of Vienna's residents live in publicly built or subsidized housing, with the city directly owning roughly a quarter of all housing units.14 Residents pay for it. The system generates revenue. And because the public option is actually good, private landlords can't gouge anyone, because they'd lose tenants to the city. The government doesn't subsidize housing. It competes in the housing market and wins, and the profits go back into the public. The United States did something similar with public housing in the 1930s and 40s, projects that were well built, financially solvent, and popular with residents, until the real estate lobby spent decades deliberately defunding and stigmatizing them because they couldn't compete with a government product that worked.

The evidence is everywhere. Public enterprise is not theoretical. It is functioning right now, in this country, generating revenue that reduces the tax burden on working people. And yet the people making budget decisions at the local level are still presenting tax hikes and layoffs as the only two options.

When people push back against privatization, the approved alternative is almost never "the government should do this and keep the revenue." The approved alternative is a nonprofit. Which sounds better until you look at what the nonprofit sector has become: its own class of middlemen, complete with six-figure executive directors, bloated administrative budgets, and a structural incentive to never actually solve the problem they were funded to address. A homeless services nonprofit that eliminates homelessness has eliminated its own reason to exist. An addiction treatment nonprofit that cures addiction has defunded itself. The incentives are perverse, and yet this is the model we've decided represents the responsible answer to privatization. We replaced corporate middlemen with credentialed middlemen and called it progress.

The real answer, the one that makes every think tank and government contractor and consulting firm uncomfortable, is public enterprise. Government agencies that provide services, do it well, and generate revenue that goes back to the public instead of to shareholders. The Postal Service proved this worked for two centuries before Congress deliberately killed it. The Bank of North Dakota has been quietly proving it for over a hundred years. Dozens of countries use this approach for housing, banking, energy, and transit, and there's nothing stopping your city from doing the same. It starts at your city council.

Here is what success looks like. A city launches a municipal broadband utility. Within three years it generates $4 million in annual revenue while delivering faster, cheaper internet than Comcast. That revenue funds a public pre-K program. The pre-K program charges sliding-scale fees, operates at a surplus in wealthier neighborhoods, cross-subsidizes services in lower-income ones, and still nets revenue for the general fund. The budget deficit disappears. Nobody gets fired. Housing stays affordable because the city is competing in that market too. This isn't utopian fantasy. These are things that individual cities and states are already doing in fragments. The only thing missing is a political class willing to connect the dots.

Some elected officials are already moving. Seattle's new mayor Katie Wilson is backing a billion-dollar social housing bond and a publicly owned housing developer that voters approved twice by landslide margins. New York's new mayor Zohran Mamdani is proposing 200,000 publicly built housing units and city-run grocery stores to drive down prices. Portland's City Council unanimously voted to develop a social housing implementation plan and is sending housing experts to Vienna to study the model. These aren't fringe positions. They're winning platforms. The window is open.

So the next time your city council says they can't afford something, or a state legislator says there's just no money, or any elected official presents you with the false binary of raising taxes or cutting services, ask them one question: what non-tax revenue streams has this government explored?

Watch their faces. If you see confusion, that's your opening. That's the moment where you get to be the one who teaches your city council member something their public policy program never did. Bring the Bank of North Dakota's annual report. Bring the USPS revenue history from before 2006. Bring the rate comparisons between municipal broadband and Comcast. Educate them. And if they won't learn, find someone who will and support them instead.

They might look at you like you have two heads. Keep talking.

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Sources

1 Solid waste privatization: Waste Business Journal via Waste Dive (March 2025). The U.S. waste and recycling industry reached $104.63 billion in revenue in 2024. Of $69.46 billion in collection revenue, public companies generated $45.25 billion, private companies $11 billion, and municipalities $7.96 billion (approximately 12%). (https://www.wastedive.com/news/us-recycling-waste-market-100-billion-revenue-milestone-waste-business-journal/743163/)

2 WM CEO compensation: SEC DEF 14A proxy filing, 2025. Jim Fish total 2024 compensation: $17,097,120.

3 WM federal lobbying: OpenSecrets, Senate Office of Public Records data. $840,000 in 2024. (https://www.opensecrets.org/orgs/waste-management-inc/summary?id=D000000161)

4 WM corporate subsidies: Good Jobs First Subsidy Tracker. (https://subsidytracker.goodjobsfirst.org/parent/waste-management-inc)

5 Pentagon $436 hammer: Project on Military Procurement (now POGO), mid-1980s Navy procurement scandal. Gould Corporation billed $436 for a $7 claw hammer after approved overhead allocation. (U.S. Naval Institute Proceedings, December 1985)

6 Utility commission revolving door: Heern, K. (2023). "Who's controlling our energy future? Industry and environmental representation on United States public utility commissions." Energy Research & Social Science. Analyzed 800+ commissioners across all 50 states, 2000-2020. Found approximately 25% had utility or fossil fuel industry backgrounds, up from 15% in 2000.

7 USPS pre-funding mandate: Postal Accountability and Enhancement Act of 2006 (P.L. 109-435). GAO December 2012 report confirmed the payment structure: fixed annual payments of $5.4-5.8 billion from 2007-2016, followed by rolling 15-year amortization periods through 2056 and beyond. The Postal Service Reform Act of 2022 eliminated this mandate.

8 UPS/FedEx use of USPS last-mile delivery: UPS SurePost program (launched ~2003) and FedEx SmartPost (now Ground Economy) both historically handed off packages to USPS Parcel Select for final delivery. UPS Negotiated Service Agreement with USPS expired December 31, 2024. (Supply Chain Dive, January 2025)

9 Bank of North Dakota: BND 2024 Annual Report. Net income of $200.4 million, $10.8 billion in total assets, A+ S&P credit rating maintained. More than $1 billion in cumulative transfers to general fund and state programs since first transfer in 1945. $25 million contribution toward $43 million state budget deficit, 2001-2003. (https://bnd.nd.gov/category/annual-report/)

10 Alaska Permanent Fund: First dividend checks of $1,000 distributed June 14, 1982. Paid annually since. Fund receives at least 25% of all mineral lease royalties, rentals, and bonuses. (Alaska Permanent Fund Corporation, https://apfc.org/who-we-are/history-of-the-alaska-permanent-fund/)

11 Municipal broadband pricing: Urban Institute (2025) confirms community fiber networks "almost always" offer lower prices than private ISPs. Harvard Berkman Klein Center (2018) found community-owned broadband cheaper in 23 of 27 markets examined. As of May 2025, 331 municipal broadband networks operate in the U.S. per the Institute for Local Self-Reliance, with 9 of the 10 fastest ISPs using community networks. (https://www.urban.org/urban-wire/could-investments-community-broadband-bridge-digital-divide)

12 Public vs. private electricity rates: American Public Power Association, using EIA data, reports residential public power customers pay approximately 13% less than customers of investor-owned utilities. (https://www.publicpower.org/periodical/article/public-power-affordable)

13 State-controlled liquor sales: 17 control states per the National Alcohol Beverage Control Association. Pennsylvania alone generated $3.18 billion in gross sales in FY 2023-24, contributing $868.3 million to state and local governments. (https://www.nabca.or