It the U.S. did somehow achieve a balanced budget and was able to create reserves equal to or greater than our debt,

Removing a dollar for every dollar added to the economy via spending would not allow the growth of reserves you allude to unless banks were lending at 0 interest and their cost of reserves from the Fed was also 0, or below. As soon as you add any cost to lenders or borrowers above 0 it become deflationary, which is how recessions and depressions are created.