There is a 3rd method already being implemented,[1] though it is enhanced by your second method. If no more satellites were put in orbit, eventually there would be no satellites (or space junk) in orbit.
How about 150 years? Because due to orbital decay, that is about how long it would take for everything to fall out of orbit. If there is a Kessler Syndrome, depending on its effect at higher orbits, it might take a few hundred more years, but definitely definitely not billions of years.
[1] https://en.wikipedia.org/wiki/Orbital_decay