Aren't you being self-contradictory? You say the gov't isn't spending its "own money." What money would that be? Money it "prints?" But you have been vociferously against printing, and not totally without reason. So you mean tax dollars, I take it. But tax dollars are money that society has collectively decided to give to the gov't to spend on common needs. No one is "taking" anything. We may individually moan and groan about how much tax we pay and what it's spent on, but these things are in the long run collective decisions. And by voluntarily living in a society we implicitly agree to abide by its rules, even though we don't like them.
And please don't complain about high taxes. We have low taxes here in the US, the total tax burden is 24% of GDP vs 34% weighted average for other OECD countries In fact only 3 countries (Chile, Ireland, and Mexico) have a lower tax burden than the US. And if we could get some reasonable tax income from the super-rich then the burden on the rest of us would decrease.
But you seem all too ready to blame gov't for all our ills. How does the gov't cause inflation? It doesn't of course, but rather endeavors to control it thru monetary policy. It seems generally agreed that a small amount of inflation is a sign of a healthy economy, but of course people on fixed incomes (me, and you I think) are understandably wary of inflation.
Your questions are very interesting and important. First off the government gets money in three basic ways. Taxes, printing, borrowing. It doesn't earn money like people who work or invest and produce things. Government produces nothing.
Inflation is the expansion of the money supply. There has to be some relationship between the amount of currency and the country's production of goods and services. For example, as the population increases, there are more goods and services that can be produced. More people who are teachers, dentists, cops, and goods like airplanes and food. So the Fed can increase the amount of currency (inflation) without any dire effect. It balances out. You have more money but also more goods and services. So prices stay the same all other things remaining equal.
However, if the Fed inflates the dollar while the amount of goods and services stay the same or are reduced as has happened due to Covid shutdowns, you now have more money chasing fewer goods. That pushes the price of things higher because each dollar is worth less. It's like baseball cards of Mickey Mantle. Let's say there are one hundred in circulation and each currently is worth about $1500 on the collector's market. Well, if someone printed up another hundred cards making there two hundred in circulation, each card would be worth less. Same with money. Too much and they're worth less and relatively the cost of things go up hurting especially fixed-income people, retired, and salaried people although they might get an increase in pay, usually not equal to the devalued currency. Inflation hurts the poor and middle class the most. Investments in assets like real estate and the stock market tend to go higher, as richer people have advantages by keeping their money in assets not savings.
Of course, inflation hurts the economy eventually and that could mean a lower market value as well in stock and real estate. As the cost of things goes up, fewer people can afford to buy the product and manufacturers start to lose business. Then they lay off employees and the whole economy can suffer. When the government prints rather than gets its money from taxes for social programs or infrastructure, that really hurts the economy as inflation raises prices higher than incomes. Also, keep in mind that taxes and borrowing, and government spending especially deficit spending reduces the amount of money available for private investment which is required to grow an economy.
