Against the backdrop of the severe U.S. economic downturn caused by the coronavirus, Ford School economics professor Justin Wolfers told ABC News Australia May 31 that the country was ill-prepared to provide a safety net for its citizens.
The report stated that America's economic roots are still deeply entwined with a society that has been raised to more readily embrace capitalism and shun social systems.
Wolfers, who was born in Australia, commented, "The US simply lacks the sense of social solidarity that keeps the Australian social safety net operating. Australians believe in a fair go and we believe when you're down on your luck, the Government — funded by your neighbors — should be there to help you."
The Federal Reserve last year published a report warning nearly 40 percent of Americans could not come up with $400 cash for an emergency.
There's no doubt the working class has so far been hardest hit by the pandemic, but Wolfers says it is hurting all income brackets.
"The problem many families have is simply one of liquidity — they have a lot of assets," he said. "A lot of middle class families have a car, have a house, but you can't use your house to put food on the table. If you have an economic shock like this and you don't have a readily accessible rainy day fund, you're out of cash. And when you're out of cash, you're in trouble."
You can see the report here.
Justin Wolfers is a professor of public policy and economics. He also serves as a member of the Congressional Budget Office Panel of Economic Advisers. Wolfers' research interests include labor economics, macroeconomics, political economy, social policy, law and economics, and behavioral economics. Previously, Wolfers was an associate professor of business and public policy at the University of Pennsylvania and a visiting professor at Princeton University. He is a research associate with the National Bureau for Economic Research, a senior fellow of the Brookings Institution, a senior fellow of the Peterson Institute for International Economics, a research affiliate with the Centre for Economic Policy Research in London, and an international research fellow at the Kiel Institute for the World Economy in Germany.