What do you mean by saying that Tether can infinitely inflate Bitcoin's price? We trade different pairs of Bitcoin, we can trade Bitcoin to USD, Bitcoin to USDT, Bitcoin to USDC, Bitcoin to DAI, Bitcoin to TUSD, Bitcoin to FDUSD, Bitcoin to Euro and etc... How can tether printing money affect Bitcoin's price? It will only affect Bitcoin to USDT pair, not others.
I get your point but the FED and the government should worry more about USDT. I used to think and worry about that a lot too but then I stopped caring for this exact reason. If the owner of the real FIAT doesn't care if somebody somewhere printing fake FIAT, why should I care?
What do you think about Paxos Stablecoins? PYUSD and USDP? BUSD was backed by Paxos if I remember correctly and users successfully managed to claim their dollars one in one.