Seems to me the government defines economic health quite purely in terms of GDP figures, which are a measure of spending, not efficiency.
Well, sometimes. The US government is big, with many divergent interests. Sometimes economic health is measured by GDP growth. Sometimes by stock market growth. Sometimes by wage growth. Sometimes by foreign trade. Overall, if wasteful spending were the only priority, they could probably do an even better job of it.
Regardless, spending forces efficiency. It's not "efficiency for the sake of higher consumption". It's "higher consumption for the sake of efficiency". But efficiency is not the end goal. It's just the next step. So it doesn't matter where on the circle you start. What's important is the process:
spending -> consumption -> efficiency -> centralization -> risk -> failure -> dependence -> more spending
Cash for Clunkers artificially increased the efficiency of big corporate auto manufacturers. For a time, there was pressure for centralization through mergers. At the least, it has prevented smaller competitors from arising. It has created the risk that subsidized, centralized auto companies will again fail to bring efficient cars to market. And when that happens, Americans will again be dependent upon foreign energy supplies secured by big government and made affordable by government spending.
So, no, it's not really efficiency. But it's the definition of vicious cycle.