Since the number of people working is determined by the potential employment pool, you could spend up to the level of full employment and never need to worry about the debt portion of the budget. I can't say. We do know that it is possible to maintain overal deficits for long periods of time, but such deficits as have been maintained have only occasionally been sufficient to generate full employment. The system also works because it is posited that the banking system has an unlimited capacity to want, and to buy, govt bonds, due to the operations of the system. The weakness of this argument is in part due to the objections I h ave been raising all along.
Banks are passive agents and prisoners of the government.
Similarly, the investment function is assumed to be immune to the effects of full employment. It might be, for example, that interest rate effects on the asset values of bonds, as a high percentage of total portfolio, might be less desirable than some other mix. Also, Kaleckian issues come to mind. Investors may not coope rate with investing under the conditions of a full employment work force. The accelerator principle might cause some problems, too.