Why Government Data Centers Are 40 Percent Empty

Episode 49 of The Fiscal Policy Podcast with Fexingo examines why government data centers run at just 60 percent utilization on average, wasting billions in taxpayer money on unused servers, cooling, and power. Lucas and Luna dig into a 2025 GAO report that found federal agencies maintain over 8,000 data centers, many with utilization below 40 percent. They compare this to private-sector best practices at Google and AWS, which push utilization above 80 percent. The episode also explores the cultural and procurement barriers that prevent consolidation — including agency turf wars, multi-year contracts, and fear of job losses. A concrete case: the Department of Veterans Affairs' ten-year, $1.2 billion effort to close just 12 of its 120 centers. Lucas argues the real fix requires shifting from ownership to service models, moving from 'my servers' to 'commercial cloud'. Luna asks whether the government can ever match private-sector efficiency given its constraints. No hot takes — just a sharp, specific look at one of the biggest hidden costs in federal IT spending. #DataCenter #GovernmentWaste #GAO #FederalIT #CloudMigration #ServerUtilization #TaxDollars #PublicSpending #VeteransAffairs #AWS #GoogleCloud #ITProcurement #Consolidation #Economics #FiscalPolicy #FexingoBusiness #BusinessPodcast #Efficiency Keep every episode free: buymeacoffee.com/fexingo