I’m not arguing the overall point, but this float has grown far larger than a healthy economy needs. As anyone trying to run a business can tell you, those with the bottomless wells of cash are cannibalizing everything they touch.

The function of the economy has become the production of money, as an end in itself. Aka the bottom line.

Why doesn’t the government tax out, what it currently borrows, as this is apparently surplus wealth to those who have it. The response would be to quickly find other ways to store value, than as public debt.

The government doesn’t “fund” the economy. To fund something is to bring some outside value, like an investor to a company.

The value the government provides is a stable social framework and infrastructure, for society to grow. If that system is not competently managed, then various elements start fighting within it and negative feedback results in further break down. Simply issuing more currency is characteristic of a system starting to lose control and making more promises than it can keep.

“the currency represents a tax credit “owed” to its holders”

It is a contract. That tax credit is an obligation.

“ the only way to “pay” such a debt is to impose a tax that “cancels” the currency.”

Which is necessary when the money flowing through the pipes is bursting them.