Grow Money With Tax-Shielded Savings

JOHN STIGLITZ, President Clinton's chief economic adviser, reported in a recent interview that the White House is trying to find ways to increase the national savings rate and encourage longer-term investment. Both admirable goals. Both long discussed. Unfortunately neither seems to light a fire under politicians.

Presidents will gravely go on camera, flanked by flag and Oval Office paraphernalia, about almost any subject considered to be a crisis or incipient crisis.

But not savings. Dull, dull, dull say even advisers who live by ''It's the economy, stupid!'' signs.

Well, dull or not, the national savings rate is important to the US standard of living.

That's your standard of living. That's current-generation retirees' standard of living, and their children's and grandchildren's.

Presidents, economists, and the investment industry have been waiting around a decade or so for an expected stampede of baby boomers into the savings habit.

There now are signs that it's beginning to happen.

After all, tuitions to pay, plus widespread word of Social Security and pension uncertainties, do concentrate the mind even in a country where marketing and tax laws have long made borrowing the ''smart'' thing to do.

But passive waiting isn't what we elect presidents to do, certainly not about a major national problem.

So let's have some jawboning from the president. And some incentives from Congress.

What jawboning?

Certainly, Bill Clinton, economy wonk, is well equipped to sell Middle America on taking more advantage of existing tax breaks for savers.

That's 401K plans (tax-deferred annuities) in offices and factories and IRAs (Individual Retirement Accounts) for wage-earners who have no workplace retirement program.

Who's going to listen?

The president's Saturday radio chat won't do the job. Why not get some stars in to the White House to explain how little this kind of tax-shielded savings will dent the average paycheck - and how quickly compounding will make those retirement savings grow.

Stars?

Try Peter Lynch, Bill Gates (everyone's idol when it comes to the Midas touch), Warren Buffett (ditto), Andrew Tobias, Sir John Templeton, or First Friend Barbra Streisand (a shrewd investor).

Even Ross Perot and his charts would help explain the personal benefits that also fit the national need. Remember the formula: savings = capital formation = investment = greater productivity = higher standard of living.

It would also help for Mr. Clinton or members of his cabinet (Robert Rubin or Ron Brown) to jawbone gatherings of small-business leaders to persuade more of them to adopt 401K plans.

Congress has a role to play, too. It can expand the limit on annual IRA contributions from $2,000 to $5,000 or more. (A more prudent step than a hasty tax cut, in terms of tax-revenue loss.)

The time is ripe. Sen. William Roth, who has taken the helm of the powerful Senate Finance Committee from Bob Packwood, is a believer in expanded IRAs. So are Senate majority leader Bob Dole and many House GOP leaders.

It has long been fashionable to lament the fact that Americans don't have the saving discipline that most East Asians and Europeans do. If the president and Congress would take some simple leadership steps, that could change.

Once America's workers see how fast compounded savings build - as they check their quarterly totals - a new ethic is likely to replace the borrow-now-pay-later wisdom so long in vogue. Back to the future our grandparents practiced.

It has long been fashionable to lament the fact that Americans don't have the saving discipline that most East Asians and Europeans do.