latter has some detailed accounting about currency notes -- such as accounting expenses for printing the cash, Bureau of Engraving and Printing shipment etc! Taxation and Treasury spending are independent. If the Treasury chooses to spend less than it takes in in taxes then US runs a surplus. This happened in the Clinton years. If the Treasury chooses to spend more than it takes in in taxes then US runs a deficit. This happens most years. But the Treasury takes $40 in taxes, so you are left with only $60 and you spend it. But the Treasury spends the $40 that they took from you. (your taxes get credited to the Treasury's account) So the entire $100 gets spent either way. zanon Reply: February 12th, 2010 at 12:45 am Curious: In your example, yes that is what happens. But suppose Treasury spends $1M. Or suppose it spends $0. The amount it spends is up to it, and has nothing to do with the amount it taxes you. Curious Reply: February 12th, 2010 at 2:04 pm Zanon, if Treasury spends $1m and collects another $40 in taxes, it will spend it too, bringing total spending to $1,000,040. If Treasury spends 0 and collects $40 in taxes, it will spend the $40, bringing total spending to $40. Treasury always empties its account, doesn't it? zanon Reply: February 12th, 2010 at 2:13 pm No, Treasury does not always empty its account. It spends what it spends. That is what "independent" means when I