Funded by taking on debt. Using new debt to pay back old investors. I think there is a name for this strategy?
Why shouldn’t the government borrow money at low rates to spend in ways that raises gdp generating new tax revenues that are higher than the interest paid for said loan?
There is a limit to how much debt it can support, but it's determined only by that country's productivity and tax structure. As long as it can pay the interest, it can keep growing its debt.
Eventually that reaches equilibrium, but there's no reason for any particular $BIGNUM to be the equilibrium point. It's currently around 10% of all spending, which strikes me as a large but not unsupportable number.