Who is the counterparty when the central bank creates money for the government? It’s the government of course. But as the government owns its central bank it cannot be in debt to itself. So the concept of credit worthiness is irrelevant for a currency issuer. Currency users are different.

Private banks create money too when issue loans. All government spending is money creation from its central bank account. All taxes cancel money. All government bonds are deposit taking facilities.

And money creation always occurs before taxes. It’s spend and tax, not tax and spend.

The Bank of England has literally confirmed that central banks of sovereign nations create money and do not need to borrow. It’s basic monetary operations.

www.bankofengland.co.uk/working-pape...

So where does the money that bond holders deposit come from?

All of those things you highlight can be true and it is also true that governments create money. Government sets a budget, which gives it a mandate to instruct the central bank to spend money into the economy on its behalf. Where else does money come from?

But what they are not for is to fund government spending. All government spending is new money issuance.

Bonds are secure savings for excess liquidity of the private sector. They provide certainty for bond holders, allow governments to manage interest rates and most importantly, manage resource allocation by drawing money out of the economy so it can’t be spent on finite resources - such as in ww2.