They aren't spending tax revenues like that. The tax revenues are the cash flows that back up the borrowing. How does the borrowing work? Through the Fed! Even when the Treasury sells bonds directly to you or me, who sets the rate? It starts at the Fed Discount "Window." Also, show me any piece of U.S. currency you desire. Every single one says Federal Reserve Note. When bonds are cashed in fro. where does the currency come?