You are on the right track, but I would not say that DDI makes “most of what we know about economics incorrect.” It is only a different way of supplying the economy that already exists with money. It doesn’t change anything about understanding the relationships among variables in that economy. (For an economist, it makes one variable, the supply of money, truly ‘exogenous’, i.e., independent of any other economic variable and outside the control of any institutional entity.)

It is most similar to quantitative easing. There, money is created to purchase existing debt. Here money is created to provide income to individuals. (The invention of QE inspired a major revision — in the Summer of 2009 — of the model for a DDI I already had developed.)

The option does exist to create money to fund government as well. That is a separate issue from the DDI, however.

Unlike the current economy, a mechanism does exist to draw money out of the economy to prevent too much money from accumulating in it, but the whole thing is fully self-regulating.