That's not actually how money creation works. Governments never dump new money into banks, and banks don't have any ability to 'distribute' it or lend it out. Q

That's not actually how money creation works. Governments never dump new money into banks, and banks don't have any ability to 'distribute' it or lend it out. Quantitive easing was an asset swap (bonds for reserves) that was meant to increase the ability of banks to lend, but it didn't really work in theory and nor in practice, so didn't do anything except for pushing up asset prices because they had reserves and wanted to convert that back into something that gave them more return, so buying up financial assets. It didn't do what it was meant to because generally the banks were never liquidity constrained, lending was more demand constrained. In general the Government puts new money into the economy by spending, and removes money from the economy by taxation. But most of the money in the economy is created through bank lending (with a corresponding creation of private debt).