If there's no force that pushes it towards stabilization - then the eventual conclusion is extinction. And so far, it definitely seems like it doesn't trend towards equilibrium. People aren't like animals that reproduce based on availability of resources or predators. If the population drops, nothing forces it back up again.

And lower birth rate -> smaller young population -> higher ratio of retirees to taxpayers -> less free money to invest in new businesses/infrastructure/etc. That means a worse quality of life for everyone. Worse pay, higher taxes, less city/state/federal investment.

That's called a death spiral and eventually ends a civilization, if it goes uncorrected. There's no fancy monetary trickery that magically fixes it either. The only real hope is alleviating the burden completely - via something like incredibly advanced robots powered by real AI (not LLM garbage).

That would free up the resources to allow each new generation to do new things, instead of being less and less able to just maintain status quo.

I think it's that assumption is the problem. Most social systems are predicated on having enough net contributors to provide for net recipients, but with a declining population the ratio of contributors/recipients can get small. There may be solutions to this, but current social systems will likely fail if left unchanged. That doesn't mean the only solution is population growth, but we do need to do something