I dont agree with that and here's why: Whenever taxation > spending (ignore once off liquidation of assets), the government actively destroys private sector savings (dont take my word for it, go ahead and map the transactions on the balance sheets of the pvt sector, central bank and the treasury, and you'll see the transaction reduces pvt sector assets). What you're saying is rather than risk inflation eroding the value of those assets, lets just destroy them outright. The counter-argument could be that private sector would issue more loans on aggregate (create money) if inflation were lower but that borders on tea-leafy speculation