You skipped the part about the Federal Reserve and how its supposed to be semi-independent from the spending of the government - i.e. the government cannot prin

You skipped the part about the Federal Reserve and how its supposed to be semi-independent from the spending of the government - i.e. the government cannot print money but the federal reserve can to fund its operations in the form of buying bonds/securities/etc. Also the government does not distribute the money via government spending. The Federal Reserve distributes the money and it can do so even without the government by purchasing bonds from the private sector. Your suggestion is actually the common misunderstanding and it reverses the responsibilities of various institutions in such a way that most people feel they are subjects of their government. Small update: collecting taxes doesn't remove money from circulation either. Ay-yi-yi, people are misinformed.