The best way to get people to start saving is stop taxing it, not just for the middle class, but for everyone. When the wealthy invest it helps the economy be it the world economy (which means they can buy more U.S. goods) or the U.S. economy.

When you talk about not taxing dividends and capital gains everyone screams tax cut for the “rich”, but the taxes on investment hurt the middle class and the poor a lot more than the wealthy. It follows from the “rule of 72″ which is a rough hand way of calculating how long it takes for your money to double. You divide your return into 72 and that tells you how long it takes to double your money. Take 15% or 25% off of your return and it take a lot longer. If you already have a million, you don’t need it to double that fast, but when you are working on your first 1K, 10K, or 100K, it really makes a difference.

If Americans would remember how to save, losing your job at fifty wouldn’t be a big deal, at that point working would be pretty much optional (or at least a much lower income would be acceptable) if you had saved and invested consistently over a lifetime. How many people buy a new car every five years? Well if just doubled that to every ten years that would be an extra 20K invested every ten years. Yet no matter how much the average American makes he or she seems to spend 110%.