Economics- The govt. accounts for 20% of the GDP. Why is Govt. such a major factor in the economy?

Question

The govt. accounts for 20% of the GDP. Why is Govt. such a major factor in the economy?

Answer 1

The federal government spends less than half of the revenues directly with the largest items defense which counts for GDP consumption and infrastructure which counts as GDP investment. The rest gos to transfer payments for social security, interest on the debt and payments to cover medical expenses of the old and the poor and other smaller programs. Transfer payments are not considered as government expenditures for GDP calculations but as income to the recipients and are balanced by the taxes collected to fund them so have a net of zero on the income accounts,

Answer 2

GDP = Consumption + Investment + GOVERNMENT PURCHASES + Net Exports

Thats why.
Basically when we earn income, some is stuff we consume (goods, and services).

some is invested (equipment that lets you produce more goods/services, inventories, and school buildings, etc..)

and some we pay in taxes to gov. The gov then uses that money to buy goods and services for us, and we count the value of those goods/services in the GDP.