1/Because you can't collect enough revenue to finance a modern government by issuing consolidated government liabilities - the liabilities of the central bank and the central government. This is just an extension of the notion of seignorage revenue, which is revenue from the... https://twitter.com/pmboothe/status/1263823015990738944

2/inflation tax. As with any tax, there's a tax rate, and a tax base. Increase the tax rate, and you generate more revenue, given the tax base, but the tax base falls with a higher tax rate, which will reduce revenues. So, there are two opposing effects, and there's some...

3/revenue-maximizing tax rate. The inflation rate is a tax rate - the central bank is taxing currency holdings, basically. So, there's some revenue-maximizing inflation tax. Generally, modern thinking is that this tax is inefficient. At 2% inflation, inflation tax revenue is...

4/very small, but we're fine with that. What about revenue from the issue of government debt? Certainly we can borrow in the short run to finance government spending, but there's a limit on how much revenue we can generate in the long run. You might think that with some...

5/constant level of real government debt to real GDP in the long run that we're not getting any revenue, as we have to pay the interest on the debt every year. But if the real rate of interest is low enough (and it's quite low now) then we can in fact sustain postive revenue...

6/from rolling over the government debt indefinitely. But the same logic applies as in the inflation tax case. The low real rate of interest reflects taxation at work. There's a distortion. And there's a limit on how much revenue collection we can sustain indefinitely from...

7/debt issue. Basically, the revenue we can get indefinitely isn't much. And we've got a distortions to deal with. There's a distortion from the inflation tax, there's a distortion from the low real interest rate - basically an economy with too little consolidated government...

8/liabilities. So, sorry, as usual in economics there's no free lunch.