The Economic Blueprint for Radical Federalism
How States Can Build a New Economy Outside Washington’s Control
Even the strongest legal defenses are meaningless if states remain financially dependent on Washington. The federal government’s most effective tool of control isn’t legislation—it’s money. Through funding conditions, monetary policy, and federally regulated banking systems, Washington forces states into compliance. Break this system, and Washington’s ability to dictate policy collapses.
The path forward is clear: build state-run financial institutions, restructure tax policies to eliminate reliance on federal funds, and form multi-state economic compacts that weaken Washington’s fiscal leverage.
I. No State Can Stand Alone
Any state that resists Washington’s mandates risks economic isolation, retaliation, and blacklisting. The federal government has used its control over banking, trade, and federal funding to punish states that defy its authority.
This is not theoretical. It is happening right now.
California (2025): Trump threatened to withhold wildfire disaster relief unless the state implemented voter ID laws and changed water policies (CalMatters).
Nationwide (2025): The White House froze all federal grants while reviewing whether they align with Trump’s policies, explicitly targeting climate programs, diversity initiatives, and infrastructure projects (Governing).
Sanctuary Cities (2025): The DOJ blocked grants to cities refusing to cooperate with federal immigration enforcement, mirroring Trump’s first-term strategy (EPI).
If Radical Federalism is to succeed, states must break this cycle. This means building state-run financial institutions, restructuring tax policies, and forming multi-state economic alliances strong enough to withstand federal retaliation.
II. Public Banks: Cutting Washington Out of State Finance
The Federal Reserve is the economic enforcement arm of Washington. It does not simply regulate interest rates or stabilize inflation—it is the primary mechanism through which the federal government dictates financial conditions to the states.
Recent events show how financial leverage is already being used as a weapon:
In February 2025, the Trump administration froze Medicaid reimbursements and food assistance programs in a sweeping funding halt, forcing some states to scramble for emergency funding (Star Advertiser). These and similar examples were no accident - they’re the administration yanking at the leash to remind us it’s there.
Disaster aid is now conditional—Trump openly linked California’s wildfire funding to its voting and environmental policies (CalMatters).
The Bank of North Dakota: A Model of Economic Sovereignty
North Dakota has proven that public banks can shield state economies from federal manipulation. Since 1919, the state-run bank has:
Insulated North Dakota from recessions, offering low-interest loans to businesses and ensuring economic stability outside of federal monetary policy.
Kept state revenues inside North Dakota, instead of being deposited into federally regulated financial institutions.
Allowed the state to fund infrastructure without relying on federal grants.
The Strategy: Public Banks as a Firewall Against Federal Control
Eliminate reliance on federal grants : Instead of waiting for Washington to approve state projects, states can self-finance infrastructure, housing, and business development through public banks.
Starve Wall Street’s influence : When states deposit funds in federally regulated banks, they give Washington leverage. Public banks ensure state money stays under local control.
Resist economic blackmail : A state with its own bank, its own revenue streams, and its own financial network cannot be threatened with funding cuts.
█ Why This Matters Now
Washington is already using federal funds as leverage to force compliance. States that refuse to establish public banks are choosing to remain financially dependent—and vulnerable.
III. State Taxation Models That Weaken Federal Fiscal Control
The federal government doesn’t need to send in troops to control the states—it uses money as a weapon.
In January 2025, the Trump administration froze all federal grants under a “policy review,” threatening to withhold billions from infrastructure and social programs (Governing).
Georgia (2025): The Trump administration denied extended federal disaster relief for hurricane recovery, forcing the state to cover a funding shortfall (11Alive).
How to Fight Back
Increase state-based revenue streams : States must expand their own revenue sources—through income taxes, resource extraction fees, and alternative taxation models. This dovetails with a commensurate call to reduce the federal tax burden in an era of decreased federal support for social programs and decreased local reliance as the states pick up the slack - one which many conservatives will have difficulty denying.
Eliminate Washington’s fiscal leverage : The federal government ties funding to compliance with federal policy. A state with independent revenue cannot be blackmailed into submission.
Taxing Federal Land : The federal government owns over 50% of the land in states like Nevada, Utah, and Idaho yet pays almost nothing for its use. States must impose land-use fees on federally controlled land.
█ Why This Matters Now
Washington is already cutting funds to coerce states. States must act before federal money is weaponized further.
IV. Next Steps: From Strategy to Execution
This is the beginning, not the end. States must break free from Washington’s financial grip—but strategy is nothing without execution.
Look out for the upcoming article Building an Independent Financial & Trade Network for Radical Federalism, which will provide a step-by-step guide to implementing public banks, alternative financial infrastructure, and multi-state trade networks.
Economic sovereignty isn’t theoretical. It’s achievable. The question is whether states will act before it’s too late.
A couple of questions. How are the states united if Washington wields no power over them? What happens when a state decides to ignore the constitutionl? Say, the government of Indiana decides to brings back racial segregation.
Interesting idea, but as a Minnesotan, ND doesn't seem to be much of a leader in the things we'd want a state to fund, so I'm not sure how to think about it.