"The Dwindling Sphere", a short story by Willard Hawkins, also the (unaccepted) answer to this old question and this one; first published in Astounding Science-Fiction, March 1940, available at the Internet Archive. Any of these covers look familiar?
Scientist develop a device that converts or compresses any material into a desired product (i.e. put in 10 lbs of soil, out comes 5 lbs of steel, or 5 lbs of wood, or 5 lbs of food, etc.) or maybe it was out comes 5 lbs of soil and energy for a year, can't remember exactly which.
We have enlarged the apparatus and installed a hopper, into which we shovel rock, debris—in fact, anything that comes handy, including garbage and other waste. If my experiment after all proves a failure, I shall at least have the ironic satisfaction of having produced an ideal incinerator.
[. . . .]
It is this process which Philip apparently has perfected. His method involves a three-dimensional "scanning" device which records the texture, shape and the exact molecular structure of the object to be reproduced. the record is made on microfilm, which then needs only to be passed through the control box to re-create the object as many times as may be required.
"Think of the saving of effort!" Philip remarked enthusiastically. "Not only can objects of the greatest intricacy be reproduced without necessity of assembling, but even natural foods can be created in all their flavor and nourishing quality. I have eaten synthetic radishes—I have even tasted synthetic chicken—that could not be told from the original which formed its matrix."
[. . . .]
The problem must have been more difficult in the early days. Where we now distribute raw-material concentrates in the form of plastoscene-B, our forefathers had to transport the actual rock as dredged from the gravel pits. Even though the process of distribution was mechanical and largely automatic, still it was cumbersome, since material for conversion is required in a ratio of about twenty to one as compared with the finished product.
Today, of course, we have the intermediate process, by which soil and rock are converted at the pits into blocks of plastoscene-B. This represents, in a sense, the conversion process in an arrested stage. The raw material emerges in these blocks reduced to a tenth of its original weight and an even smaller volume than it will occupy in the finished product—since the mass has been increased by close packing of molecules.
But some scientists are raising concerns, as there are many places around the country(world?) where there are Very Large excavation pits where companies are digging up soil for packaging to sell in stores so people can supply their devices.
I was amused on my last day by a question asked by a ten-year-old boy, the son of one of the supervisors. We stood on a rampart overlooking one of the vast production pits, several hundred feet deep and miles across—the whole space filled with a bewildering network of towers, girders, cranes, spires and cables, across and through which flashed transports of every variety. Far below us, the center of all this activity, could be discerned the huge conversion plant, in which the rock is reduced to plastoscene-B.
The little boy looked with awe at the scene, then turned his face upward, demanding, "What are we going to do when this hole gets so big that it takes up the whole world?"
We laughed, but I could sympathize with the question. Man is such a puny creature that it is difficult for him to realize what an infinitesimal thing on the Earth's surface is a cavity which to him seems enormous. The relationship, I should say, is about the same as a pinprick to a ball which a child cn toss in the air.
The story ends with [. . .] observing that the Earth & Moon were a true twin system, two bodies of the same size in orbit of each other.
On one occasion it was the legend that, instead of being twin planets, our Earth and Luna were at one time of differing sizes, and that Luna revolved around the Earth as some of the distant moons revolve around their primaries.
This theory has been thoroughly discredited. It is true that there is a reduction of the Earth's mass every time we scrape its surface to produce according to our needs; but it is incredible that the Earth could ever have been several times the
size of its companion planet, as these imaginative theorists would have us believe.