If the government borrows too much, inflation happens, and fear of inflation causes more inflation, as lenders demand higher interest rates to pay for it, putting more money into circulation.
Yours, like most criticism of MMT, begins with a straw man. It also includes some misconception about how debt and deficit work.
There is no perfect system, and MMT doesn't posit itself as such. It simply describes how the system works in our present reality. It is not a magic elixir against poor governance or miscalculation. One can say that taxing is necessary to establish the state's currency, so therefor any spending in that currency is "revenue dependent', but that only sets up the straw man. It doesn't address anything in current political reality.
It is not the "act" of taxing, but the fact that "positive revenue" isn't possible for a sovereign currency-issuing government with a fiat currency that makes Nick's statement true. The best such a government can do is to balance prior debt with collections, eliminating the money supply and taking it back to the beginning need to establish its currency in the economy.
MMT doesn't recognize tax collections (or bond issues) as "revenue" for this reason. One cannot collect or borrow what doesn't yet exist and neither can improve the state's ability to spend when it already has an infinite amount of its currency available to it. There is no "infinite+1" in spreadsheet accounting or math.
If the government spends into an area where there is no slack in resources or labor to deploy the "price" of the resources and labor it desired may increase. However, that isn't "inflation" of the currency, which is an extremely difficult thing to cause with a fiat currency. The central banks of both the US and Japan have not been successful at creating enough inflation to meet their targets for decades.
To your second point (as lenders demand higher interest rates to pay for it,) given that bond issues aren't a funding mechanism the currency issuing government never "needs" to borrow. The US dollar is "self funding" when it is spent into the private sector and borrowing is a "following" event enabled by that spending. This makes the government the "price setter" for the resources and labor it requires, not dependent upon borrowers. As such, it also dictates the rate paid to lenders, even if that rate is inflation negative.
