It can go negative, or Fed can do another round of QE, there are plenty of tools. The real question is whether the deficit can grow indefinitely without consequences, and if this is a moral hazard (e.g. no risk priced in borrowing).
As long as other countries do business in USD and keep buying US debt, the party keeps going.
With fiat, you can spend as much as the combined purchasing power of all your citizens through money printing.
When you’re the reserve currency, that pool is extended to the purchasing power of many many countries.
That’s probably why, from a strategic POV, the US must remain the largest military force and continue to police the world.
With dollar hegemony, the US might even introduce new ways (like MMT) of sipping purchasing power of participants.
But even mr. Draghi might agree that right now the ECB is pretty powerless, given that it's rates are already below zero.
If you insist in fixing your home with your car jack, don't complain about the results.
https://www.business-standard.com/article/finance/can-banks-...