I don't think it contradicts Warren's argument at all. Warren has been very, very focused like a laser all along on the fact that what really matters is that all government spending/taxation is manipulating numbers on a spreadsheet -- the physical cash doesn't matter. His point about "they put it in a shredder" is to again point out that the physical "money" doesn't matter. Yes, the Tsy's account at the Fed would be credited if someone were to pay their taxes in cash and the money were shredded, but from Warren's perspective this is simply the changing numbers on a spreadsheet that doesn't constrain/enable the federal govt whatsoever aside from the federal govt's own self-imposed constraints (such as not allowing the Tsy to run overdrafts at the Fed). Also, when Tsy's mature, new Tsy's are issued in their place, except for when the govt is running a surplus. Overall, whenever the Tsy's account is drawn down -- whether due to spending or due to settling a maturing Tsy -- beyond what can be called in from tax and loan accounts it holds at the banks, the Tsy must issue new Tsy's as long as it is not legally allowed to run an overdraft at the Fed. And, no, it wouldn't really "hurt" to change savings accounts to checking accounts, but legally yet again the Tsy can't overdraw its own account. In short, Warren frequently abstracts from the details of the self-imposed constraints probably because, well, they're SELF-IMPOSED. It obviously doesn't