Federal Resource Allocation Efficiency Audit

Abstract: This report applies systems engineering methodology to quantify allocative inefficiency in U.S. governance across four dysfunction categories: direct spending waste, compliance burden on the private sector, policy-induced GDP loss, and system inefficiency. Using Monte Carlo simulation across ten components with OECD benchmarking, we estimate an aggregate efficiency gap of \$4.90T (95% CI: \$3.62T-\$6.50T) annually and recoverable capital of \$2.45T (95% CI: \$1.81T-\$3.25T) if U.S. performance converges toward OECD median efficiency. This categorization distinguishes direct budget waste from broader economic dysfunction, each requiring different solution pathways. We also translate the efficiency gap into QALY and VSL-equivalent welfare terms for interpretability. Summary: Systems audit estimating an annual U.S. efficiency gap of \$4.90T, with \$2.45T recoverable at OECD-median performance across direct spending waste, compliance burden, policy-induced GDP loss, and system inefficiency.