[Political leaders]…continue to ignore the savings crisis that should worry them: Many Americans do not have enough savings ever to be able to retire. Traditional macroeconomics cares only about aggregate levels of capital stock. There is plenty of that. But it is shared among too few people. The median family of retirement age has $12,000 in savings. That is a terrifying figure for a country where Social Security, the state pension, pays out a maximum of roughly $2,500 a month, and pensions for both public and private employees are underfunded.
For the median, wage-earning family, the best way to encourage saving is not to lower capital gains taxes or estate taxes, but to give the family access to a retirement plan that delays taxation until retirement. (In his textbook, Mr Mankiw encourages these plans, but only as another way to increase capital investment.) For those who put money into one, median accounts at retirement age rise to about $100,000—still inadequate for a lengthy retirement, but a significant improvement. About 70 percent of Americans have access to these plans through their employers. But just over half use one.