But we let the belt out all that way, and the belt still touches their waist!

Then there is more demand. Keep going. There is nothing that has unlimited demand.

You can't reduce demand by constraining supply, all you are doing is making people unhappy.

If your policies are very free, you'll find people will figure out how make things more efficient. For example inexpensive delivery will become possible if there was enough space for traffic.

I know this because I've lived in dense cities (no delivery service - it's simply too hard to find parking, and thus too expensive) and wide urban areas (every store offers delivery because it's cheap and easy).

And that's exactly the opposite of what everyone thinks will happen - they want cars off the road, and replaced with delivery, without actually making delivery practical (i.e. inexpensive).