From my understanding, people in government steal everyone else's money (they call this taxing, borrowing, and inflation), and when they have stolen too much, they go to war to steal some more, to distract others from their theft, and to use the war as an excuse to print. When this doesn't work, they just keep going until people realize what's going on.

Well if people have lost faith in the currency, then they all rush out at once to dump the dollar and buy products while they still can. The sharp rise in demand causes a sharp rise in prices. If the dollar is no longer money, then for all intents and purposes and perfect or not, all the products become money, until a new money is established.

Usually the government prints dollars chasing these prices, and it's never enough, so they print more. This also conveniently as mentioned keeps credibility while paying off government debt. But if people in government wanted to handle their debt right, they would have done it already. So there would be no expectation that they would stop printing until they thought they had blamed enough, stolen enough, made others suffer enough, fooled enough, or more likely got bored enough to try another fiat scam.