The coronavirus outbreak demonstrates the need for a healthcare “safety net,” as well as innovation only the private sector can provide, according to  University economics professor Kenneth Rogoff.

Rogoff, author of This Time Is Different: Eight Centuries of Financial Folly, addressed the possible economic impacts of coronavirus in an interview on SiriusXM’s Breitbart News Sunday with host Joel Pollak.

Pollak asked what economic lessons can be learned from the ongoing coronavirus spread.

“There is certainly a lesson for having a safety net so that so that if you’re facing a pandemic, you could treat everyone and really have a framework [so] people aren’t afraid to come in and you can treat everyone,” replied Rogoff.

Government healthcare policy must be balanced with free-market forces, added Rogoff.

“The whole world depends on the United States for the innovation in drugs and health care, and there’s a very good chance that the vaccine’s going to come from here because we have this very developed private sector, and the question is how to have a system that has both.”

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Government-driven redistributive responses to the coronavirus threat will be favored by those seeking expansion of state power, noted Rogoff.

“If you think this would be a good idea anyways, particularly fighting inequality, then you’re not so nervous about trying to increase transfers to people to deal with that,” Rogoff said. “If it turned out the [coronvirus threat] wasn’t so bad, you kind of wanted to make the government bigger [and] you kind of wanted to do these transfers anyway, so you’re willing to err on that direction, but clearly the most effective expenditures you could make are ones that address the problem, [such as] that build up the health sector.”

Rogoff proposed some possible government measures to address the coronavirus threat: “Certainly having people get free tests, for example, if they want to, or possibly finding ways to make it easier to call in sick might be a short-term solution [and among the] kinds of things to government can spend money on.”

Government policy, Rogoff said, must also seek to “stem the panic,” but should aim beyond financial concerns alone. “[T]he panic is not just about [if] their money [is] in the bank. The panic is much more about people’s health.”

Rogoff predicted: “We’re going to end up doing stimulus policies out of this, even in the United States, even with the civil war going on in the political sphere. They’re going to do some kind of significant fiscal stimulus this year to try to mitigate the coronavirus. Call me an optimist, but I’m expecting that.”

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