AND UBI WILL MAKE THE TRANSFER MORE EFFICIENT:

The book's core is a series of chapters taking on numerous concepts the government tries to measure.

Income? They're counting only cash income--leaving out in-kind transfers like food stamps and employer benefits, as well as failing to subtract taxes. Inflation? They're overestimating it, which means they assume more of our gains are eaten up by rising prices than is really the case. Both of these problems, meanwhile, affect the measurement of poverty, which depends on whether a family's income exceeds a threshold that is adjusted for inflation over time. Inequality also hinges on what is counted as income, and to make matters worse, international comparisons are sullied by the Census Bureau's failure to conform to the reporting rules other countries follow. These aren't wild conspiracy theories; they're backed up with careful explanations and citations, and for the most part already well known to people who follow these academic debates.

Even more interesting is the authors' attempt to present a fresh picture of American households' finances--both in terms of the current income distribution and in terms of trends over time--by accounting for problems like these.

Ranking households by their earned income (including employer-paid benefits and investment income), there's a 60-to-1 disparity between the top 20 percent and the bottom 20 percent. The official Census Bureau numbers, including all cash income, put the disparity at about 17 to 1. But add in all transfers and subtract taxes, and the gap shrinks to 4 to 1.

Government transfers to the lowest-earning quintile are enormous, totaling about $45,000 per household--about $19,000 from old-age entitlements, $2,500 from disability, $10,000 from Medicaid and the Children's Health Insurance Program, and $1,500 from food stamps, plus $13,000 from other programs. The mix is different for elderly and non-elderly households, but the authors report very similar total results when the elderly are excluded, with bottom-quintile non-elderly households also receiving about $45,000 in total.

Indeed, by Gramm et al.'s calculations, the bottom 60 percent of households have been made startlingly equal. The bottom 20 percent end up with roughly $50,000 after taxes and transfers, versus $54,000 for the second quintile and $66,000 for the middle one. If one further adjusts for household size, the lowest income quintile slightly beats the second-lowest, which works more but sees less government largesse and has more mouths to feed.

Regarding poverty, the official rate has stayed within a narrow range of about 10 percent to 15 percent for decades. But when the authors add in government benefits the official measure fails to count, the rate is more like 3 percent, and it falls even lower if the inflation adjustment is improved as well. Gramm et al. also cite work from Bruce D. Meyer and James X. Sullivan that reached similar numbers by measuring poverty based on consumption rather than income.

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