[wheelerof4te]

"because you can only keep borrowing money and paying the (increasingly large) interest on it for so long."

Not if you are the US. Because the US $ is a reserve currency needed by the rest of the world (primarly for oil, since most of the oil is still priced in US $). So, what can US do? Well, it can print the $ indefinitely because the countries of the world will always need it to run their economies.

But, lets say that the need for US $ inside a country dissapears. What then? Then, that country is placed under sanctions by the collective West (examples Iran, North Korea and the Russian Federation) or, as was in the cases of Iraq and Libya, bombed to submission.

Which brings us to the answer why the US economy is staying afloat despite an enormous national debt and the obvious "living beyond one's means" budget.