Raise the Hammer

To begin, Smith, I would like to point out that you have just argued in favour of governments borrowing money to increase GDP, as in his world, at a bare minimum there is no negative effect, as the net sum is zero. Congratulations.

"Debt is nothing more than one person giving money to another." False, what you've described is a gift. A debt also assumes the repayment of said money and typically accumulated interest throughout the amortization of the debt.

The definition of GDP is GDP = C + I + G + (X − M), or GDP = private consumption + gross investment + government spending + (exports − imports)

I did enjoy how you used "REAL GDP" as if adding the word real in front solidifies your argument. Taking inflation into account does nothing to alter the fact that debts do not factor into GDP.

Despite your personal negotiating in bad faith (lying about your intent for borrowing money), the tens of trillions of dollars lent to countries is spent, and quantifies as the G in the above equation. And yes, the net debt is zero, but the amount owing isn't and again, the amount owing doesn't count against GDP, which is why it's such a horrible indicator in today's world. It would be like you borrowing a billion dollars and calling yourself a billionaire. The issue that has arisen from being a debt owing society is that GDP is a measure of consumption, and we can all consume a little more because of all the money being lent out. Forcing the collection of all outstanding external debts would destroy global GDP (particularly America's). More importantly, for the rest of the world (say Japan), if America in particular) isn't buying all of the crap they make, their GDPs drop off.

As for the martian question, GDP has slowly increased over civilization's history as we've extracted goods not from other planets, but our own, crafted them and exchanged them with one another. The first good would be food, eventually precious stones, then metals. The rapid increases over the past couple hundred years were due to our ability to extract not just objects, but energy from the planet's non-renewable resources. Starting with coal, then oil and uranium.... This increase of energy has allowed machines to do what would have taken the labour of thousands, increasing the margin of profit on a sale. These goods have a nominal cost in some cases no cost) compared to the sale price, and this difference, no matter the resource, has been the driver in economic growth. More recently borrowing with what looks more and more like never repaying, has been the driver.