Let me explain.
Those of you who went to school may remember the electrical power formula.
W = IV
Power in Watts is equal to the Current in Amps time the Voltage in Volts. What they may not have explained is that only really applies to Direct Current (DC) electricity supplies.
We don't use a DC system around our houses. We use an Alternating Current (AC) system instead - because AC makes moving electricity around larger areas an awful lot easier than it is with DC.
With AC you introduce a direction change in the flow of the current and voltage, so that it wobbles backward and forward 50 or 60 times a second.
Now with traditional style 'resistive' equipment like heaters, the W=IV equation still holds, and you get a waveform like this:
In technical terms, what you have here is a Power Factor of 1. All the power delivered does useful work.
But as we get more sophisticated in our use of electricity, and introduce more effective and efficient devices like fluorescent lights, electric motors and mobile phone chargers then we change the way power works in an AC system. The capacitors and induction circuits introduce a phase shift between the current and voltage so they are no longer aligned precisely. Then you get a waveform like this:
What happens here is that some of the power is now negative, which subtracts from the power in the positive sections. This is known as 'reactive power'. What is happening is you are given lots of power, and then some of it is taken away again before you can use it (sound familiar yet?).
In technical terms, we have a situation where the Power Factor is less than one. Not all the power supplied does actual work, and some of it is taken away again. But if you don't supply that power and take it away again, then the devices will not be sufficiently energised and you'll get less output from them
The total amount of power you get in your house is measured in KVA (kilovolt amps), whereas what you are charged by the electric company is measured in kWh (kilowatt hours). So the KVA amount is the 'gross' power supplied, and the kWh amount is the 'net'. The difference is the Electricity Tax, and you're paying it all the time. Because without it your fridge won't keep your groceries as cool as they should be, your fluorescent lights wouldn't be as bright as they are (and may not turn on at all), and your iPad would be flat.
Now electrical engineers and power companies hate reactive power. It means that the wires have to be larger than they otherwise would be in an entirely 'resistive' world, and of course it means their generators have to push more electrons backward and forwards than would ideally be the case (some of which leaks as heat and therefore there is some running cost). But, being smart engineers not stupid politicians, they know they have to supply the reactive power into the system to allow the work society needs electricity for to get done.
So what has all this esoteric electrical theory got to do with the economy. Well...
Clearly we use a monetary economy, not a barter one. Just like we use AC electricity not DC. Therefore using ideas that only apply to DC systems on an AC system is going to be a shocking mistake (sorry).
We clearly need a generation system (the government sector) that has to circulate more money around the system (KVA) than would otherwise be the case to energise our advanced mechanised production system and ensure that it can deliver full output. If it doesn't then the system just generates less output.
The government spending/taxation cycle is the Reactive Power in the economy. With an advanced productive economy that has a Power Factor less than 1 (doesn't need all the labour to produce all the output), it has to be there to ensure that all the real work that could be done gets done.
Trying to get rid of Reactive Power is a fools errand. As any Electrical Engineer will tell you, the only way to get rid of reactive power is to get rid of the advanced economy. Why would we want to do that?
Learn to love Economic Reactive Power. It's what allows the most Real Work to get done.