The main fallacy is limited highways cause congestion. A highway can support a lot of traffic, it's exits and on ramps are generally the problem as traffic just backs up. Which often turns extra traffic lanes into really expensive parking lots.
Highways are great for long-distance trips to sprawling suburban destinations. They don’t really mix well with dense cities though. Highways have high speed but low capacity relative to the amount of space they take overall, in comparison to surface streets. When they reach a certain traffic density, highways get blocked up, even if you add a lot of exits.
http://urbankchoze.blogspot.com/2014/07/is-induced-demand-re...
(I think that blog may have better posts on this topic, but that’s the one I could find in a quick search.)