As for 'government spending' it is the sum of government expenditures on final goods and services, including salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government.
First of all, it should be noted that GDP was not designed to evaluate the well-being of a country. Instead, it measures particular types of economic activities within the country, which does not necessarily refer to a standard of living. For one crude example, a country with all goods and services exported will have a high GDP but low well-being of its citizens.
Second, GDP takes into account only documented operations. It does include neither black market, nor non-monetary operations, like bartering, showing inaccurate information for countries where any of these issues plays an important role. Moreover, some companies commit a cross-border trade within themselves in order to escape high taxation - this distorts GDP, creating additional imports/exports data.
Third, GDP indicator shows little information for changes in ecology, society, and lifestyle. ...Show more