Not only that, it effectively takes potential people out of the workforce. It also gives people no reason not to be deviants leading to higher expenditure on enforcement and incarceration. Not to mention potential higher crime rates.
This is going to be catastrophic. Imagine the government using AI that does not factor that waters will rise and things will get more humid when deciding to build houses or bridges only for them to be underwater.
Reminds me of the scanslation scene. Was a cleaner/redrawer.