How States Can Beat Wall Street at Their Own Game

The United States Postal Service ran profitably for decades until Congress deliberately broke it. Republican legislators in 2006 forced USPS to prepay $5.4 billion annually for future retiree health benefits. No other agency or private company faces this crushing requirement. The predictable result: $54.8 billion in artificial losses that Republicans used to claim the government doesn't work. According to the USPS Inspector General, 87% of postal losses between 2007-2016 came from this sabotage, not operational problems. Congress finally repealed the requirement in 2022 and forgave $57 billion in manufactured debt, but the damage was done.

Public utilities, municipal water systems, ports, and countless other services continue generating revenue while serving the public. America has always operated this way when corrupt politicians don't interfere.

Today, cities and states are using this same approach to solve budget problems without raising taxes. They're competing directly with exploitative private companies, keeping profits local, and funding public services with the revenue.

The formula is a simple one. We can remove shareholder profits and executive bonuses, provide better service at lower cost, and use the savings to benefit everyone.

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The Bank of North Dakota demonstrates what's possible when states keep their money working locally. The nation's only state-owned bank generated $200.4 million in profit in 2024 while making loans to small businesses and farmers that Wall Street banks ignore. During the 2008 financial crisis, it kept lending while private banks froze credit. North Dakota, a generally conservative state, has operated this successful public bank since 1919, returning $585 million to the state's general fund over its history.

The bank costs taxpayers nothing while managing $1.1 billion in legislature-directed loan programs for schools, infrastructure, and disaster recovery. It profits because it doesn't need to generate 15% returns for shareholders.

Our society receives a 3% return that funds teachers, rather than a handful of executives receiving massive bonuses.

Chattanooga's municipal broadband network exemplifies this principle in the digital age. EPB Fiber generated $30.2 million in profit according to Tennessee State Comptroller reports, serving over 120,000 residential and 9,000 business customers with speeds that forced competitors to upgrade their infrastructure. The city's network started in 2010 with a $330 million investment funded through bonds and federal stimulus, offering plans from $58 for 300 Mbps to $98 for 2.5 gigabit speeds. The network transformed Chattanooga from a declining industrial city into a tech hub while keeping every dollar of profit local.

The success terrified incumbent providers. AT&T spent over $140,000 lobbying Tennessee legislators and backed lawsuits to prevent EPB from expanding to neighboring communities where residents still lack broadband access. After Chattanooga built its network, AT&T suddenly discovered it could offer gigabit service it had previously claimed was impossible. Comcast dropped prices 30 percent in areas with municipal competition.

Currently 16 states have laws restricting municipal broadband, written by telecom lobbyists to protect monopoly profits. But where it's legal, over 400 municipal networks now serve 600 communities. Wilson, North Carolina offers $10 monthly lifeline internet for low-income residents. Lafayette, Louisiana provides 10-gigabit service with all profits staying local. Communities across America are tired of sending millions to distant corporate headquarters while residents lack basic connectivity.

So what about a failed project?

San Francisco's 2004-2007 wireless experiment failed because it chose outdated technology and relied on a private partner with a flawed business model. Chattanooga succeeded because it built future-proof fiber infrastructure on its existing electric utility backbone.

The San Francisco failure helps us identify what it takes for these projects to actually work. Successful municipal networks require proper technology choices, adequate initial investment, professional management, and building on existing infrastructure. When cities get these fundamentals right, they win.

States are capturing similar value through cannabis programs. Washington State's Liquor and Cannabis Board generated $454.7 million in fiscal year 2024 using existing infrastructure and staff. No new bureaucracy needed. Oregon brought in $154 million. Colorado collected $255 million. The states capture revenue that previously went to dealers and cartels, now funding schools instead of criminal enterprises. Over 50 percent of Washington's cannabis revenue funds public health programs including community health centers, substance abuse prevention, and Medicaid support.

Public power companies have demonstrated this principle for over a century. They charge 13 percent less than private utilities nationally according to the American Public Power Association. But many exceed that average dramatically. Sacramento's SMUD rates are 50 percent below PG&E's, saving customers over $150 monthly on typical bills. Austin Energy returns $115 million annually to city coffers. Nebraska, another red state, runs entirely on public power and ranks first nationally for reliability with the ninth lowest rates. They profit because they don't pay shareholders or massive CEO compensation packages.

Banking regulation demonstrates how government action can protect consumers while generating massive savings. Overdraft fees plummeted from $12.6 billion in 2019 to $5.8 billion in 2023, a 51 percent reduction, after Consumer Financial Protection Bureau pressure and voluntary bank changes. Bank of America reduced fees from $35 to $10 and saw overdraft revenue drop 91 percent, from $1.56 billion to $140 million. Capital One and Citibank eliminated overdraft fees entirely. The CFPB's December 2024 final rule will cap overdraft fees at $5 for banks with over $10 billion in assets starting October 2025.

This is particularly valuable for low-income households who are 3.4 times more likely to pay overdraft fees than high-income households, with 9 percent of accountholders paying 80 percent of all fees. Government intervention was required to stop predatory practices.

Washington State created Cascade Select, a public health insurance option that caps hospital payments at 160 percent of Medicare rates instead of the 300 percent private insurers pay. Enrollment exploded from 8,000 in 2022 to over 75,000 by early 2025, with 135 percent growth in 2024 alone.

The program achieved statewide coverage in all 39 counties for 2025, offers the lowest premium silver plans in 26 counties, and saves nearly 90,000 subsidy recipients an average of $514 monthly.

Connecticut's public employee insurance program saved $56 million last year through better pharmacy negotiations. Nevada and Colorado are launching similar programs. The premiums stay in-state instead of flowing to insurance company headquarters.

California is launching insulin manufacturing to sell at $30 per vial, though implementation has faced significant delays. Originally promised for 2024 delivery when announced in March 2023, the program now faces potential delays until 2030 according to the American Diabetes Association. No FDA application has been submitted and clinical trials haven't started as of March 2025. The state allocated $100 million total, with $50 million to partner Civica Inc. and $50 million for a California facility that was later eliminated due to budget cuts.

The program plans to produce three biosimilar insulins at $30 per vial and $55 for pen five-packs. Drug companies currently charge $300 for the same product that costs $10 to produce, representing price increases of 1,196 percent for some insulins since launch. When California announced its program, Eli Lilly, Novo Nordisk, and Sanofi all cut insulin prices by 70 to 78 percent.

Not every profitable public service requires major investment. Michigan generates $87.5 million yearly from unclaimed bottle deposits. The cost to implement was passing legislation. Washington DC brings in millions from vacant property fees, pushing speculators to sell or develop while generating pure profit with no infrastructure needed. States could run their own payment processing and keep the 3 percent fee that currently goes to Visa and Mastercard on billions in transactions.

These successes share common patterns. Private companies have gotten comfortable exploiting captive markets. Comcast maintains 50 percent profit margins because customers have no alternative. Pharmaceutical companies raised insulin prices 184 percent from 2012-2021 because diabetics can't shop around. Banks collected $12.6 billion in overdraft fees in 2019 from people living paycheck to paycheck, though Consumer Financial Protection Bureau regulations have cut that to $5.8 billion.

When the government provides an alternative, these companies suddenly discover efficiency. Every city sending millions to Comcast could run its own network. Every state watching residents ration insulin could manufacture it for $30. Every community gouged by private utilities could provide public power. The initial investments pay for themselves through revenue. Bond markets eagerly fund municipal broadband because returns are guaranteed.

The money saved circulates locally instead of being extracted to distant headquarters. Every dollar spent on municipal broadband pays local salaries and contractors. Every dollar sent to Comcast leaves for Philadelphia. Small cities lose millions annually to shareholder extraction. Recapturing that wealth transforms local economies.

The barriers are primarily political, not practical. Telecom lobbyists write state laws banning municipal broadband. Pharmaceutical companies claim government manufacturing endangers safety despite Sweden successfully doing it for decades. Banks predict economic collapse if states compete with them, ignoring North Dakota's century of profitable public banking.

But results speak louder than lobbying. Chattanooga residents save money on internet while their utility generates $30 million for public services without raising taxes. Bank of North Dakota's profits fund education instead of Wall Street bonuses. Public power customers pay less while their utilities fund parks and libraries. Conservative states like Nebraska and North Dakota prove this succeeds through keeping money in communities instead of letting monopolists extract it.

We don't need to raise taxes to fund government. We need government to compete in markets where private companies extract wealth from our communities. The Founding Fathers understood this when they created the postal service. They knew some services are too important to leave to private profit. That wisdom applies to broadband, banking, medicine, and power today. Public services can serve the public and pay for themselves. They already do. The question isn't whether the government can run profitable services. We've proven that for 250 years. The question is why we're still letting monopolists extract billions from our communities when we know exactly how to stop them.

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