Rebuilding America’s Fiscal Future: An Engineer’s Perspective

Introduction

This article isn’t about politics. It’s about solving a pressing problem with urgency and pragmatism. As someone who has served this country in uniform and spent a career as an engineer and optimizing solutions based on data, I approach this issue with the same mindset I bring to any complex challenge: gather the data, identify inefficiencies, and optimize the system.

Imagine if the U.S. government were a household. It earns about $80,000 a year but spends $110,000, leaving it short by $30,000 annually. On top of that, this household owes $525,000 in debt, and the interest payments alone cost over $10,000 a year—money that could be spent on essentials like healthcare, education, or infrastructure. This is the financial reality America faces.

In fiscal year (FY) 2023, the federal government spent $6.2 trillion while generating only $4.9 trillion in revenue, leaving a deficit of $1.3 trillion. The national debt has climbed to $36 trillion, and interest payments alone consumed $659 billion in FY2023—about 14% of total revenue. Without significant reform, projections suggest these payments will exceed $750 billion in FY2024 and could top $1 trillion annually by FY2025.

This is unsustainable. To rebuild America’s fiscal future, we must address the core pillars of federal spending: Social Security, healthcare, defense, and interest on the debt. These are the largest cost drivers, and while many smaller inefficiencies exist, fixing these foundations is paramount.

Understanding the Fiscal Crisis

The Cost of Servicing the Debt

The rising cost of interest on the national debt is one of the fastest-growing expenses in the federal budget. In FY2023, the government spent $659 billion on interest payments, up from $475 billion in FY2022 and $352 billion in FY2021. By FY2025, these costs could exceed $1 trillion annually, rivaling spending on Social Security or defense.

Graph: U.S. Net Interest Payments (2016–2024)

• Interest payments have nearly tripled in just seven years, from $240 billion in 2016 to a projected $750 billion in 2024.
• Rising interest rates and increasing national debt are the primary drivers of this growth.

Key Drivers of Rising Interest Costs

1. Higher Interest Rates: To combat inflation, the Federal Reserve has raised interest rates significantly over the past two years. As a result, the average interest rate on Treasury securities has risen from 1.6% in 2021 to over 3.5% in 2023, and the cost of borrowing has increased accordingly.
2. Growing National Debt: The U.S. national debt has grown from $27.5 trillion in 2020 to over $36 trillion in 2024, driven by pandemic-related spending, rising entitlement costs, and defense budgets. Every additional dollar of debt compounds the interest burden.
3. Debt Maturity and Refinancing: A significant portion of existing low-interest debt is being refinanced at higher rates, further increasing costs. Approximately 30% of the debt matures within the next three years, exposing the government to sustained rate hikes.

Table: Federal Debt and Interest Trends (2016–2024)

Implications of Rising Interest Costs

1. Crowding Out Other Priorities: Rising interest payments reduce the funds available for critical programs such as healthcare, education, and infrastructure. For every dollar spent on interest, fewer resources are available to invest in the nation's future.
2. Ballooning Deficits: The federal deficit, already at $1.3 trillion annually, will grow even larger if interest costs continue to rise. Without intervention, the government will be forced to borrow more just to pay off existing obligations.
3. Economic Risks: High levels of debt servicing can erode investor confidence, increase borrowing costs further, and weaken the country’s economic position globally.

The Drivers of Federal Spending

The Big Four: Social Security, Healthcare, Defense, and Interest

Together, these four categories account for over 75% of federal expenditures.

Pie Chart: FY2023 Federal Spending Breakdown

Social Security: A System Under Strain

Social Security, created in 1935, was designed for a smaller, younger population. Today, it faces significant challenges:

• Annual Expenditures: $1.2 trillion in FY2023, funded primarily by payroll taxes.
• Revenue Shortfall: Social Security revenues (approximately $1.05 trillion annually) are no longer sufficient to cover benefits, requiring the government to borrow to fill the gap.
• Trust Fund Depletion: The Social Security Trust Fund is projected to run out by 2035, resulting in automatic benefit cuts unless reforms are enacted.

Healthcare Spending: The Rising Giant

The combined costs of Medicare and Medicaid reached $1.9 trillion in FY2023, making healthcare the single largest expenditure category in the federal budget. Despite this, the U.S. often ranks below other developed nations in healthcare outcomes, highlighting inefficiencies in program administration and delivery.

Defense Spending: Opportunities for Optimization

At $866 billion annually, the U.S. defense budget is the largest in the world. While national security is essential, inefficiencies in procurement, contractor management, and program redundancy inflate costs unnecessarily.

Bar Chart: U.S. Defense Spending vs. Top 10 Nations Combined (2023)

The Path to Solutions

The fiscal challenges outlined in the first section are monumental but solvable. Tackling them requires a bold vision focused on systemic reform. As an engineer, I propose data-driven, measurable solutions that target the largest sources of inefficiency: Social Security, healthcare, defense, and interest payments. This approach prioritizes sweeping structural changes, implemented within the first 18 months, to set the nation on a path toward sustainable governance.

The goal is not to diminish services but to deliver them more effectively and efficiently. Below, I outline specific reforms, potential savings, and a roadmap for implementation.

Social Security: Transitioning to Sustainability

The Problem

Social Security faces a demographic imbalance. The worker-to-beneficiary ratio has declined from 16:1 in 1950 to just 2.8:1 today, and the system is running a deficit of $150 billion annually. Without intervention, the trust fund will be depleted by 2035.

Proposed Solution

1. Privatized Retirement Accounts for New Workers:
2. Buyout Program for Workers Under 45:
3. Administrative Streamlining:

Projected Savings

• Administrative cost reductions: $6–8 billion annually.
• Long-term liability reduction: $200–400 billion annually by year 15.

Chart: Social Security Spending – Current vs. Reformed

• Current Spending (Red Dashed Line): Maintains a constant level of $1.2 trillion annually through 2040, reflecting unsustainable spending patterns.
• Reformed Spending (Green Line): Shows a steady decline, reflecting phased reductions in liabilities due to privatization, administrative streamlining, and policy changes. By 2040, spending is projected to decrease by $300 billion annually.

Healthcare: Overhauling a Bloated System

The Problem

Federal healthcare spending—including Medicare, Medicaid, and the VA—totals $1.9 trillion annually. Yet the U.S. ranks poorly in healthcare outcomes, underscoring inefficiencies in program design and delivery.

Proposed Solution

1. Integrate Healthcare Programs:
2. Shift to Prevention-Based Care:
3. Privatize Administrative Functions:

Projected Savings

• Consolidation and administrative efficiencies: $100–150 billion annually.
• Prevention-based cost reductions: $200–250 billion annually.

Chart: Healthcare Spending – Current vs. Optimized

Defense: Streamlining Without Sacrificing Security

The Problem

The U.S. spends $866 billion annually on defense, far more than the next 10 countries combined. A significant portion of this spending is lost to inefficiencies, redundant programs, and contractor overreach.

Proposed Solution

1. Enforce Competitive Bidding:
2. Eliminate Redundancies:
3. Improve Oversight:

Projected Savings

• Procurement reform: $80 billion annually.
• Redundant program elimination: $40 billion annually.
• Total annual savings: $150–200 billion.

Chart: Defense Spending – Current vs. Optimized

Interest Payments: Stabilizing Through Debt Reduction

The Problem

With interest payments on the national debt projected to reach $750 billion in FY2024 and potentially exceed $1 trillion by FY2025, debt servicing has become one of the fastest-growing expenditures.

Proposed Solution

1. Aggressively Reduce the Debt:
2. Innovative Refinancing:
3. Cap Debt-to-GDP Ratio:

Projected Impact

• Immediate stabilization of interest costs.
• Gradual reduction in annual interest payments to $500 billion by 2030.

Combined Savings

Projected Annual Savings by Category

Conclusion: A Bold Vision for a Stronger, Leaner America

The United States faces a defining moment. Decades of unchecked spending, inefficiency, and mounting debt have created a fiscal crisis that threatens our long-term prosperity. Yet, this is not an insurmountable challenge—it is an opportunity. With a bold, data-driven vision, we can transform our government into a leaner, more efficient system that delivers better outcomes for all Americans. The plans outlined in this article are not quick fixes or marginal adjustments; they are structural changes designed to secure a sustainable future.

As an engineer, I approach this problem with a focus on optimization: identifying inefficiencies, streamlining operations, and delivering impactful solutions. To that end, we must prioritize systemic reform of the Big Four spending categories—Social Security, healthcare, defense, and interest payments. However, we cannot stop there. Building a smaller, more focused government, empowering states, fostering private-sector partnerships, and embracing automation and technological advancements are equally critical to our success.

Building a Smaller, More Focused Government

A government that tries to do everything often ends up doing very little well. By eliminating outdated departments, consolidating overlapping agencies, and shifting responsibilities to the states, we can create a government that is not only smaller but also more effective.

1. Eliminate and Consolidate Federal Departments:
2. Empowering States:
3. Leveraging Private-Sector Partnerships:

Embracing Automation and Technology

The federal government has lagged behind the private sector in adopting technology to streamline operations. Automation and AI can play a transformative role in reducing administrative costs, enhancing efficiency, and improving transparency.

1. Automating Administrative Functions:
2. Streamlining Regulations:

Transparent Governance for the Future

Restoring public trust in government requires more than fiscal reform—it requires transparency, accountability, and a commitment to integrity. Key measures include:

1. Congressional Reform:
2. Transparent Budgeting:

The Combined Impact: Transformational Annual Savings

By addressing inefficiencies across all major areas of spending and governance, the United States can achieve total annual savings of over $1.3 trillion, broken down as follows:

Projected 10-Year Impact

Over a decade, these reforms would generate $11–13 trillion in savings, enabling the federal government to:

• Reduce the National Debt: Savings could be directed toward paying down the $36 trillion debt, reducing interest obligations and stabilizing fiscal policy.
• Lower Taxes: A leaner government would reduce the tax burden on individuals and businesses, unleashing economic growth.
• Reinvest in Priorities: Freed resources could fund critical investments in infrastructure, education, and technological innovation.

Chart: Current vs. Optimized Spending (Big Four Categories)

A Call to Action

This is not just a fiscal challenge—it is a defining moment for the nation. Without bold action, the United States risks losing the financial and moral foundations that have made it a global leader. But with the reforms outlined here, we can:

• Achieve fiscal stability while delivering better services at a lower cost.
• Restore public trust by making governance more transparent and accountable.
• Build a stronger, leaner government that empowers individuals, fosters innovation, and drives growth.

The next 18 months are critical. By acting decisively to reform Social Security, healthcare, defense, and government operations, we can secure a sustainable fiscal future and leave a legacy of efficiency, integrity, and progress for generations to come.

Now is the time to think big, act boldly, and transform permanently.

References

1. U.S. Treasury Department Source of historical and current national debt and interest payment data. Accessed from: www.treasury.gov
2. Congressional Budget Office (CBO) Projections on interest payments, Social Security, Medicare, and Medicaid spending. Reports: "The Budget and Economic Outlook: 2023 to 2033" "Federal Debt and the Statutory Limit" Accessed from: www.cbo.gov
3. Office of Management and Budget (OMB) FY2023 Federal Budget Breakdown and historical data on discretionary and mandatory spending. Accessed from: www.whitehouse.gov/omb
4. Social Security Administration (SSA) Data on current Social Security revenues and expenditures, worker-to-beneficiary ratio, and trust fund depletion projections. Reports: "2023 Annual Trustees Report" "Fast Facts & Figures About Social Security, 2023" Accessed from: www.ssa.gov
5. Medicare and Medicaid Services (CMS) Analysis of federal healthcare spending trends and projections. Report: "National Health Expenditure Data, 2023." Accessed from: www.cms.gov
6. Stockholm International Peace Research Institute (SIPRI) Global defense spending comparisons, including data on U.S. defense budgets and spending by other nations. Reports: "Military Expenditure Database 2023." Accessed from: www.sipri.org
7. Federal Reserve Bank Data on interest rates and their impact on federal debt servicing costs. Accessed from: www.federalreserve.gov
8. Government Accountability Office (GAO) Reports on government inefficiencies, wasteful spending, and recommendations for streamlining operations. Accessed from: www.gao.gov
9. Bureau of Economic Analysis (BEA) GDP data and federal spending as a percentage of GDP. Accessed from: www.bea.gov
10. Statista Data visualization on historical trends in U.S. federal spending and interest payments. Accessed from: www.statista.com
11. Heritage Foundation Analysis on privatizing Social Security and healthcare reform options. Reports: "The Case for Social Security Privatization." "Transforming Healthcare Through Competition and Innovation." Accessed from: www.heritage.org
12. National Bureau of Economic Research (NBER) Research on the impact of debt and interest payments on economic growth. Accessed from: www.nber.org
13. The Peterson Foundation Reports on U.S. fiscal challenges and strategies for reforming entitlement programs. Report: "America’s Fiscal Outlook 2023." Accessed from: www.pgpf.org
14. Tax Policy Center Analysis of revenue generated through payroll taxes for Social Security and Medicare. Accessed from: www.taxpolicycenter.org
15. Brookings Institution Insights into defense spending reform and public-private partnerships in government operations. Report: "Modernizing Federal Operations Through Public-Private Collaboration." Accessed from: www.brookings.edu