Multiplier effect

The supposition that an increase in (government) spending results in a proportionate increase in national income, output, and consumption. For example, if the federal government spends an additional dollar, GDP increases two dollars. The formula used to calculate the multiplier is simply: Multiplier = Change in Income/Change in Spending.
The multiplier effect can and oftentimes does lead to wealth creation in the private sector (think capital investments in Amazon, Apple, or Costco). This is because a profit motive requires a positive return on capital. In other words, borrowing funds at 5% (to make a capital investment) that ultimately provides a 15% return. However, at no point does this occur in the public sector. Logic dictates that if it did, no government would ever experience a recession or depression, as they could simply spend their way to prosperity indefinitely.