What I mean by "physical transfer" is literally that if you mailed a brick of cash to the federal government, they would just burn it.
Taxation = money out of the system
Money printing/spending = money into the system
The difference causes inflation or deflation.
Ever?
You are arguing a hypothetical case where the government takes in more in taxes than it spends, thus creating a trend toward deflation.
But that never happens. Like, ever.
But its not like its not possible. Some countries have fiscal surpluses. Canada had a surplus in 2018 [1].
I don't see what I'm arguing, and none of it is hypothetical, this is just basic economic theory. It is possible for government spending to be financed by borrowing rather than money creation, resulting in no change in the monetary base. Those mechanics I'm less educated about.
[1] https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201...
But there is.The government uses the tax money (plus extra money that they create out of nothing) to buy goods and services. Lots of them. Physical assets such as roads. F-35 fighters. Aircraft carriers. Schools. Services such as file clerks. Accountants. Public health doctors.
All of those things represent increased demand, which in turn result in net price increases (i.e., inflation). The money goes right back into circulation, rather than being removed from it, as you claim.