You can't uncreate money, once it's in the system, it's in the system. Surely what changes is who has it - is the financial system not a zero-sum game?
OK, in aircrew lingo...
Someone borrows some money to buy something (like a house or a business or a dog).
The lender sees that the house etc ain't worth the money they just loaned on it and the borrower don't seem that likely to repay it, so they think..."hhmmm risky". So they chop up the debt and sell it on at a discount.
And the person that buys the discounted debt thinks..."hhmmm risky". So they chop up the debt and sell it on at a discount.
Rinse and repeat several billion times.
And everybody employs loads of clever accountants to do clever things to balance sheets to show everybody has sh1tloads of collateral. And auditors turn a blind eye because...err nobody is sure why yet? Maybe auditors serve no earthly function...discuss? And the clever accoutants pay the *ankers lots of real dosh.
All is well until one day somebody breaks the chain and wants their money back...and, it does not exist. It never did, because all the assets have been "over leveraged". And then everybody wants their money back and all the assets (even the good ones) are now over valued.
Rinse and repeat several billion times.
And that was how funny money was created and removed. The problem is not the removal of the funny money. The problem is the legacy of vastly over- inflated asset values (caused by funny money) which no longer hold the positive equity needed to support the huge debt burden associated with them.