I don’t think you understand “the way the economy actually works” if that’s your take on how our money works and how govt spending works.

Also, if we’re talking about the USA, every state has some legal provisions regarding a balanced budget (except maybe VT?). So the state governments do account for having the budget balanced>

You’re right we run deficits in our budget but that doesn’t mean there isn’t debt being accounted for. You’re basically saying that our money magically ceases to exist when it’s collected as tax and that’s just wrong full send.