Nat, you are using debt/money creation as the guiding metric of economic activity, whether it enables or follows that activity being an important sidepoint. While you fixate on debt interest in fact monetary expansion is primarily via frl by balance sheet formation. The interest is or should be an addition of risk/profit, that is to say a manufacturer or worker producing more than just repaying principal by the benefit of borrowing, the rate used takes into account inflation estimates and then some.
So you are able in practice to take one dollar of base money, relend it many times with interest to a broad money value of one hundred, then stop lending it and have that total debt repaid over time, including interest, and be left with just one dollar sat on the counter.
That you see continued monetary expansion as necessary to make the equation whole just demonstrates that you are building a system without tolerance. In the simple example above any part that might lose/delay repayment beyond the debt interest , and with the amount of debt that small system represents being only a fraction of total wider spending activity, then non payment is not going to be a disaster of any kind. Under hard money standards expansionary lending is limited by the fact that final proof is callable, and that makes any expansionary process much more cautious.
The problem we have is that the current value of money and therefore prices and therefore the framework of finance in business, household and government and ultimately society is set by a method of availability that is completely arbitrary, based not on real meanings of possibility of redemption but on the expectation that increasing supply (hence subsidy usually via lower rates) will both fuel activity as well as increase asset prices and revenue in nominal values to the point where "everyone wins".
Now I could understand this as a social choice of wider organisation if it actually were a choice, but in fact it is not. Any person has little option but to compete in that millieu if they want to partake in the wider economic activity, and that means in effect that it is imposed - you have to pay the debt fuelled prices with the debt laden money, using more debt usually, just to participate. The allocation of that increasing debt must become increasingly slack to complete previous poor allocation and maintain some appearance of coherence, to the point where it either loses any real meaning, or becomes a ration based command distribution system controlled by a merger of state and finance. We have been there before I think, under different guises.
The problem is also as you point out, there is no easy exit from this direction except maybe hoping that it will all pan out nicely. Deflation is the bête noir of monetarists, it ruins all their plans, it ruins the one visible incentive unlimited monetary expansion offers, that of eventually being able to redeem existing debt in a form that renders the value of activity or purchase still worthwhile. Reduce that end value ( by reducing money supply and hence final valuation) and people change their minds, and the whole system of prices starts to guess at new values. My view is that the previous faith in the currency was therefore manufactured anyway, the systemic distrust that then manifests due to lack of centralised guarantee only demonstrates the illusion created by allowing a remote intermediary leverage in what were basically very mundane transactions. That organisation has become so complex as to not tolerate outside adjustment should speak volumes to anyone.
The dissolution of a belief system would leave many people at a loss if it were chaotic, but usually there is a very large gap between what people imagine in their fears and what actually happens and how they experience any changes in reality, people tend to be dedicated to their subscription and what it promises as continuation, sometimes out of deep seated loyalty, sometimes out of self interest. People and societies are very innovative though, I think that the ability is there to easily overcome major disruptions, if there is the will to do so - people dislike change of circumstance until they find and understand a different direction. It could even be said that the circumstance many find themselves in now is actually the real expression of a failed attempt at system.
The point of this discussion is really that of the balance between individual values and fair recompence vs. socially managed evenness, and which is actually more true or realistic in practice. I think that most people generally have the right base sentiment of goodwill on all sides of the argument, the difference is in how they expect those intentions expressed, or at what point and by who. Hard money advocates tend towards values remaining personal and close to source, monetarists tend towards a wider management in the belief that it will create a whole greater than the sum of its parts.
Previously society in its organic form was that greater whole, it understood itself quite well and tended towards its own personal defense, so you are going to have to do better than take it to a point of weakness in the name of a greater solution being held.
Historically supplyside economics is inextricably politically linked to the transition to welfare or socialist state formats, it moved the traditional tax/spending paradigm to financial management, control and use of, the space made open in new spending concessions to the public.
So who is being had here really?
(It takes up a lot of my time to put this all down, much as I appreciate doing so, so will not continue the conversation after this post. It will leave something to think about either way)