What your analogy is missing is a proper description of those IOUs. They are not tangible assets that have any intrinsic value on their own. They do, however, serve as a common denomination of value that enables trade across time barriers. In order to organize trade with people having different needs at different times some store of value is required. One could argue that the government does provide things of value, but that isn’t even necessary. One only has to show that some common need for currency enables it to store value in trade.
Initially, that value is one’s ability to keep their ass out of prison and avoid having the government confiscate their property. This value is conveyed by taxation, and as long as the government forces a tax and collects its own currency back it will have value until that need is more or less universally satisfied. It never “needs” (or even uses) its own returned currency back to spend as it is the monopoly issuer and must spend that currency before it is available to collect.
The purpose of the tax is never to “get” currency the government can create at will. It is to make resources in the private sector available to it without needing a revenue stream. If the government taxes only in the currency it creates and spends fairly consistently it can be assured that it will be accepted as the denomination of trade and contracts. However, a true currency also needs to store value received in trade and production.
This can only be achieved if the issuer deficit spends sufficiently to provide considerably more currency than it taxes back to enable savings and to fund growth in the economy and population. This is why it really isn’t logical for taxpayers/voters to demand that the issuer “balance” its budget, as that only makes its currency less available to the private sector and negates its ability to store value. It amounts to the theft of resources from the private sector much more than does a large negative number in its column of the spreadsheet representing the overall economy. The red ink of the currency-issuing government is the only “net” source of black ink the private sector economy has.
That number can be too large, as it represents all of its currency in the private and foreign sectors that haven’t yet been collected as tax and can be inflationary, but that isn’t automatically true. It can also be too small if it doesn’t accurately reflect the private sector’s need to grow, retire private debt, and store value/save. Private sector debt created money can also be inflationary, but cannot achieve any of those goals and cannot be used to pay federal tax obligations or purchase federal debt. Banks create reserves to facilitate interbank transfers, so they always represent obligations on their balance sheets that can only be retired with money provided by the currency-issuing government.
If the issuer also offers a method of storing value that guarantees an equitable return it can create additional inflation mitigation that doesn’t involve taxation and incentivize savings (currency drain) in bonds denominated in its currency. The issuer of the currency provides the currency to purchase bonds, so they are never “revenue” for it. They are just liquidity swaps of one form of currency (reserves) to another (bonds). As their proceeds enter the Treasury they are canceled by the debt that created them. (ditto for tax collections or any “revenue” for Treasury)
