If the government isn't able to issue more currency, isn't the alternative that they must pay everything from tax revenue and therefore be raising taxes more often? Wouldn't that also hit laborers harder in the current scenario, since the loans and unrealized gains in stocks are untaxed?
You're getting taxes either way, either via inflationary supply or paying a portion of your paycheck. Those gains get taxes when they assets are sold so in theory that's fine, but buy-borrow-die is a loophole to get around that which should be fixed.
isn't the alternative that they must pay everything from tax revenue and therefore be raising taxes more often?
Yes, and that would be a good thing in that those in the seats of power would be forced to convince people that expenditures are necessary and in there own interests.
One prominent example would be the US government being able to start and fund an unlimited number of wars. A direct tax to fund killing brown people halfway around the world is kind of a hard sell, so the source of funding is instead abstracted away via a hidden tax and debt.