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The question is not whether or not the money is spent or is gone. It all gets spent either way. The question is whether or not any added value is produced in the process. When ABC company uses its money to buy raw materials and then turns those raw materials into a usable product that is worth five times as much as the raw materials it has created wealth. When Uncle Same takes money from ABC company and then pays a doctor with it Uncle Sam has not made the money worth any more. In fact Uncle Sam needed to keep a little for himself and so it is actually worth a little less.Is 100% of the money that flows through Washington not creating any wealth? I doubt it and suppose that some is probably creating wealth. So why did the economists who invented the concept of Net GDP not account for some of the money creating wealth? I don't know but it would incorrect to think that AT invented the concept as biased as they are.I will agree with you also that 100% of the money that flows through ABC is not turned into added value. Your example of a company paying lobbyists is probably accurately described as not creating wealth. It is no doubt not easy to determine when money is used in ways that create wealth and when in ways that does not.Generally though companies are in business to create wealth (because they exist to keep some of it) and governments are not supposed to be in the business of competing with private industry by creating wealth.
The question is not whether or not the money is spent or is gone. It all gets spent either way. The question is whether or not any added value is produced in the process. When ABC company uses its money to buy raw materials and then turns those raw materials into a usable product that is worth five times as much as the raw materials it has created wealth. When Uncle Same takes money from ABC company and then pays a doctor with it Uncle Sam has not made the money worth any more. In fact Uncle Sam needed to keep a little for himself and so it is actually worth a little less.
Is 100% of the money that flows through Washington not creating any wealth? I doubt it and suppose that some is probably creating wealth. So why did the economists who invented the concept of Net GDP not account for some of the money creating wealth? I don't know but it would incorrect to think that AT invented the concept as biased as they are.
I will agree with you also that 100% of the money that flows through ABC is not turned into added value. Your example of a company paying lobbyists is probably accurately described as not creating wealth. It is no doubt not easy to determine when money is used in ways that create wealth and when in ways that does not.
Generally though companies are in business to create wealth (because they exist to keep some of it) and governments are not supposed to be in the business of competing with private industry by creating wealth.
