This is a false equivalency: I cannot buy money with money. If I take out a loan to pay off a loan, I take a loss, for example. In fact, the primary determinant of income is base tax and base production (development) added to trade. More to directly debunking your point, over something like an 80-year time frame, I can increase my income by a tiny percentage by investing in a temple that will make me money. This also costs me a building slot, which is another finite resource. So, in several generations, my investment pays off, and I'm still down a building slot. Manpower buying manpower, if priced to allow for half the current rate of AI development growth, will pay for itself in much less than 10 years, with no associated extra costs.
Except the point, you lose one building slot (an very awful new invention), you are creating money with money. Well, i agree, the amount of time, till the investment is paid back is much shorter then in the current system. But this is more a problem of the strange development system then realistic economy.
Ask yourself how you get money by tax. People are paying taxes. So, if you have a 1/x/x province, you have very low population in this province or medium sized population with bad ability to collect the taxes. If your pressing 9 times in row ADM-development in one week game time, DO YOU REALLY THINK YOU IMPROVED THE POPULATION BY 10 TIMES in ONE WEEK? But if you improve the amount of the population by 10 times, why is the amount of manpower still the same?
Or imagine a 1/15/15 province. How can a very small populated province produce mass products and a lot of soldiers?
What magic connection is between dealing peace treaties and improve production of a province??? Both is paid with same currency.
Monarch point based payment leads also to other strange things. Western nations dont have to spend much MP into technology or other things if played safe and proper, a lot is wasted now into development. But non-western nations cant spend much points in development, what is complety bullshit. Even india or china were not "western" their economy grow very strong. And development is nothing else then economic power. The major difference happens in military development. Western nations have plenty of military points, cause they are not really necessary for anything. They are pushed into military development which leads to manpower.
Even indian or chinese technology is able to stay up-to-date in military technology but not in military development. This leads to the point you have western nations with plenty and plenty of manpower and nearly up to date non-western-nations with very low manpower. The complete opposite what really happened. (Zulu vs. Britain = 20000:2000 for example)
This is utter nonsense: I'm an economist. Capitalist economics, even in the simplest possible model, considers at least the inputs of labor and capital. These two inputs combine to create both all other goods, and additional capital. However, that capital is subject to diminishing returns, and the original stock decays over time. Labor is usually considered as exogenously determined, but more complicated models consider the multitude of different goods produced, and whether or not they are luxuries versus necessities for labor (population) growth. So, we have a system with multiple inputs, natural decay rates of the means of production, and dynamically adjusted diminishing returns.
Your talking about labor and demands and decay but nothing of that really happens in EU IV. Victoria 2 represents this much much better. If your going to war every 2 years your not only killing your soldiers, you are killing your workforce and also your people that could demand for wood, fish, spice etc. Dying soldiers in your empire always means you are permanent weaker cause this people could get kids and creat more workforce and people that buy something. Nothing of this "real world" you are talking about is represented in the game.
You are building a training field in one of your province and IMMIDIATLY double the NUMBER of your available soldiers?
The calculation is quite simple. Expanding Empires use their soldiers in war. Taking away 10000 potentially soldiers over 4, 5 years to improve your tax income by 1 over a year could break your neck, if you have to go to war, which you dont wanted or expected. So you are not only paying with manpower. You are paying with the ability to go for more wars. You are paying with the risk getting beaten by your own efforts in development. You could call this also a multi-variable system. Or?

Ok, then lets change the calculation a bit. You have to pay 10000 manpower per development and 2 times the development level in percent is taken away if finished. So you are spending 5000 manpower for a development level of 25. Is that better for your calculation till its payed? With 250 more manpower per year, you need 20 years till its payed (and only if you used it for manpower, it doesnt pays it self back i you use it for tax or production.)