> When the government spends your money, you don't get to decide whether a particular transaction is good value.

And here's the root. That is an argument from principles of libertarian morality, not economics. It's fine if you want to claim that it's immoral for the government to tax and spend your hard earned assets. I just won't engage, because that's tiresome.

It's not fine to claim that the government stealing and spending your Lockian Sacred Property is "not productive" in a discussion about economics, because that is a word with meaning in the field and you're using it wrong.

(Edit: as stated, I'm not going to engage in a discussion on libertarianism in an economics thread. I'm merely pointing out that you have the economics wrong.)

I made no claim about the morality of taxation and government spending.

I'm merely observing that, when we attempt to measure economic activity via GDP, we run into a fundamental valuation problem with the government component (G). Private consumption (C) and investment (I) are valued using market prices derived from voluntary exchanges. These prices, imperfect as they are, provide at least some signal about the perceived value placed on those goods and services by willing participants.

Government spending, for the most part, lacks this direct market-based valuation mechanism derived from voluntary choice.

Because there are usually no market prices for government outputs (like defense, regulatory agencies, or infrastructure projects before user fees), GDP accounting defaults to valuing them at cost. So, if the government spends $1 billion, it adds $1 billion to the 'G' component of GDP. This is convenient from an accounting perspective, but it doesn't actually tell us whether that $1 billion expenditure generated $1 billion (or more, or perhaps much less) in genuine economic value or utility *as perceived by the citizens who ultimately fund it*.

Therefore, questioning whether government spending represents "good value" or is truly "productive" in the same sense as market activity is relevant if you're trying to get a useful measure. (This is true irrespective of your opinion about the morality of taxation.)

It's a well-known limitation in how we construct and interpret GDP figures.