This essential REMOVAL operation is accomplished with two pieces of “plumbing” we can now add, one at a time, to the new diagram: The first plumbing addition is a “drain” that simply takes Dollars out of the PS pot and destroys them. This drain is Federal Taxes. Drained out and destroyed, Dollars paid in Federal taxes are no longer available for Private Sector spending—and, therefore, can no longer contribute to price-inflation.
