The quantity theory of money states that
M V = P Q, (1)
where M = money supply, V = money velocity, P = price level, Q = real output (goods, service, etc). I think the vast majority of economists agree with this equation, although their opinion may differ on how it should be used.
It is common to associate a growing economy with growing real output, Q (i.e., more goods being produced, more services being used, etc.). If you re-arrange Eq. (1) to solve for real output, Q, you get
Q = M V / P .
So real output, Q, can grow three different ways (or more properly, it has 3 degrees of freedom):
1. Money supply, M, can increase (what you said).
2. Money velocity, V, can increase (e.g., an increase in the rate that bitcoin-days are destroyed)
3. Price level, P, can decrease (the feared deflationary spiral).
What I wrote above can be understood as
fact. Now let's talk mythology. (Myths can be useful as they align peoples' views, permitting communication from a common frame of reference. However, it is important to question from time-to-time whether our shared myths are still useful).
Presently, we operate under a myth that "deflation is bad." This means that if we want to increase real output, Q, we
must rule out Option #3:
1. Money supply, M, can increase.
2. Money velocity, V, can increase.
3. Price level, P, can decrease. NOT ALLOWED DUE TO OUR SHARED MYTHS According to our mythology, we must choose #1 or #2. So the Fed lowers interest rates to encourage spending (increase V) and buys assets to increase its balance sheet (increase M).
I would argue that focusing on #1 and #2 tend to increase output, but the increase is mostly garbage output, not real and useful output. Manipulating #1 and #2 cause us to exploit our natural resources at a faster rate but provides less real and useful output than if the economy was left to its own devices, also leaving less resources available for our children. But this is a subject for another longer post
.