It only withdraws from other resources if it doesn't or people default. Lack of expansion does not equate to greater defaults.
How do you service debt payments denominated in dollars without dollars? I'm not talking about other assets (gold, military tech, etc.) that are converted into dollars, as those dollars which purchase said assets were themselves borrowed into existence at some point and subject to servicing payments. The only other creation mechanism I'm aware of involves fractional reserve banking, which is different From Fed created dollars to purchased Govt debt because it is debt leveraged to the frac reserve ratio. If there is another method I'm missing in my analysis I'd like tho hear it.
The only stock of money that has no debt associated with it is the stock of money existing at the time gold was confiscated by FDR. In addition to the around 80 million dollars exchanged for the gold turned in.
The best thing the Fed could do is help the gov't pay down it debt instead of creation more.
With what? I seriously would like to know how that could be accomplished. (10 trillion dollar pot metal coin minted by the treasury?) In a debt based monetary system all money is, as you acknowledge yourself, based on debt. (With the minuscule caveat of money stock noted above) Add in Fractional reserve banking and it's now leveraged debt (textbook 10 to 1, but in practice a lot more). The only way for the Fed to help is to directly inject dollars, which is not a power it has (yet). Exchange created dollars for govt debt (and now trash paper) yes. Drop money from helicopters - they might get desperate enough but not yet.