The bottom line is that the country cannot spend more than it makes in tax income indefinitely and anyone who says otherwise is delusional. Unfortunately, I think the reckoning for all this debt will come sooner than many people expect.
If you do that it can be a good idea. It's a way to accelerate investment. It can also be a good idea to modulate your deficit in a cycle counter to the economy so that it acts as a stabilizer.
The US has been failing on all these. The deficits are too large and are high both in good and bad times. Eventually that breaks things.
Money is a created thing, a creature of the state. We maintain certain fictions about it (like “tax to spend”, allowing the market to set bond yields most of the time and keeping track of the outstanding bonds as “government debt”) because people are scared that Governments wouldn’t be controlled enough to manage money creation if they overtly used the powers they have to issue currency… But effectively they still kind of do it…
And while it’s not perfect it’s actually far more stable than attempts at fixed exchange rates and pegging currency to commodities like gold (which always fails eventually, because it doesn’t stand to reason that the amount of gold or any other commodity in a country would correspond to how much money the economy needs. You can set the exchange rate but it always drifts, so those periods tended to swing between big deflation and then inflation, with panics, recessions, and financial crises every few years)
But it is true that when a bank creates a loan (which to them is an asset, but to the borrower is a liability - debt) it creates a matching deposit (a liability to them) which does increase the money supply. The amount of central bank reserves is not hugely relevant to the process, that's more of a liquidity management thing. The main limitation is actually capital adequacy regulations.
But all of that aside, a Government doesn't need banks to create money so they can tax it, it permits banks to do it by granting them a banking license.