BECAUSE IT FITS THE PREFERRED NARRATIVE: It is a myth that a large share of people can’t cover a $400 emergency expense. Why does the story persist? “Others have been equally skeptical of the $400 story, and published convincing rebuttals. Nevertheless, it has become the conventional wisdom. So when this issue flared up again last month, I decided to look into it. It turns out the claim that nearly half of Americans are a flat tire away from financial crisis is largely based on an inaccurate reading of one survey question. . . . The Fed also asks respondents how a $400 emergency expense that they had to pay would affect their ability to pay their other bills. Eighty-five percent report that they would still be able to pay all their bills. Only 14% say that the emergency expense would result in their not being able to pay some bills.”

But Kamala Harris, Bernie Sanders, Elizabeth Warren et al. keep repeating it because it suits their purposes.