Proponents of Modern Monetary Theory claim that bond sales are unnecessary and only help central banks set interest rates (which should be 0% anyway according to theory) and to provide safe interest-generating assets to investors. Yet according to the general principles of the theory, bond sales have a similar effect to taxation in removing money from the economy and keeping inflation under control. So I don't get why they claim issuing bonds is entirely pointless, it seems to me that they do add to a government's non-inflationay funding capacity. So what's the deal here?
Bill mitchell explains it pretty well in this link. For me the quickest answer is that paying interest on excess reserves achieves similar objectives as bond sales, more or less http://bilbo.economicoutlook.net/blog/?p=43017
I think there is some confusion over how Government spending operationally occurs. The below is a very high-level overview.
When monetarily-sovereign Governments spend on their priorities, they increase the level of bank reserves in the system. In order to make payments to their final recipient (i.e. the seller of their good, service or labour), the banks that hold these reserve accounts at the central bank increase the deposits held by these sellers with each bank to match the increase in reserves.
The result is a seller with increased financial assets (in the form of bank deposits), a commercial bank with both increased liabilities (the deposits it now owes the seller) and increased assets (the reserves that the central bank credited them with initially when the Government spent), and a Treasury which is debited by the amount spent (putting it in "overdraft").
Taxes reverse this process by draining both deposits and reserves.
However, if a Government runs a deficit and there are both excess deposits and excess reserves in the system, issuing Government bonds only mops up the excess reserves.
The additional deposits in bank accounts are still there and available for spending.
This is why issuing Government bonds is not to combat inflation but to address reserve liquidity and target a particular short-term interest rate (although there are questions as to the neccessity of this operation in high rate environments when debt interest represents a large transfer of financial assets from the bottom of the income distribution to the top).