[prewett]

I think the usual argument for expanding the money supply is that you want to target for a small amount of inflation (I think the Fed targets 2%) to avoid deflation, since the deflationary spiral is a huge problem. Also, historically populations have been increasing, so you'd need more money just to keep the same amount per person. I'm not financier, but an (ideally) constant 2% inflation seems low enough to not be a problem for wages, but also predictable and plannable. Most investing calculations take into account inflation, and a constant 2% is a easy to include in the calculations.