A debt fueled spending spree by private enterprises boosts GDP too, for the same reason. That’s kind of the point of the number that measures spending sprees (and the other various kinds of spending).
The degree to which it’s a “good thing” or not is another question. The assumption that either party is automatically productive or wasteful is obviously incorrect. Governments can burn money or invent the internet and private industry can build jet engines or tamagotchis.
If GDP is growing equally fast in both countries but with dramatically different levels of indebtedness, you can unequivocally claim one is more productive than the other at present.
Sure, either country might invent the next AI in the future.
But if we're assuming debt-fueled government investment is what results in this future growth (big assumption), then the less indebted competitor still has the capacity to take on all the debt they aren't shouldering at present to grow even faster.
> If GDP is growing equally fast in both countries but with dramatically different levels of indebtedness, you can unequivocally claim one is more productive than the other at present.
The degree to which it’s a “good thing” or not is another question. The assumption that either party is automatically productive or wasteful is obviously incorrect. Governments can burn money or invent the internet and private industry can build jet engines or tamagotchis.