A major part of the value of any fiat currency comes from the fact that the institution with a monopoly on violence collects its dues in that currency. If you don't pay your taxes and fines in your nations currency, you go to jail or worse. The desire to avoid this creates the demand for the fiat currency. Other similar laws mandate businesses accept the fiat for discharge of private debts with consequences for not doing so etc.
The other piece that folks often conflate to extrapolate their intuition of how a household or a small business budget operates to how a country budget operates (the comment above on instant gratification). As a household, if you face a risky economic situation (economic depression, loss of jobs etc), the natural response is to reduce spending and increase savings. If you aggregate across households at a country level, this leads to lower demand, so reduction in jobs as less consumption which leads to further economic downturn, reduction in willingness of banks to lend, lower government income (as lower taxes) etc. The right government response is to spend more countercyclically and help create jobs to spur back demand through deficit spending. Then as economy improves, tax receipts go up and deficit goes down.
The other piece that folks often conflate to extrapolate their intuition of how a household or a small business budget operates to how a country budget operates (the comment above on instant gratification). As a household, if you face a risky economic situation (economic depression, loss of jobs etc), the natural response is to reduce spending and increase savings. If you aggregate across households at a country level, this leads to lower demand, so reduction in jobs as less consumption which leads to further economic downturn, reduction in willingness of banks to lend, lower government income (as lower taxes) etc. The right government response is to spend more countercyclically and help create jobs to spur back demand through deficit spending. Then as economy improves, tax receipts go up and deficit goes down.