The economist starts by explaining a view some policymakers hold: for the country to continue growing economically, the level of personal savings needs to increase. The economist then discusses a recent legislative proposal designed to incentivize people to put money into savings accounts by letting them earn interest tax-free until they withdraw the money.

The supporters of this proposal say that it will allow banks to have more money to loan, at a "relatively small" loss to the government in tax revenue. The economist responds by pointing out that similar tax-incentive programs in the past haven't actually increased the overall level of personal savings, since the money people put into these programs usually just comes from their other personal savings: i.e., they just move money from their regular savings accounts into the tax-advantaged ones, instead of saving more money overall.

This is a complicated argument, so it's important to see how everything fits together. The economist starts by discussing a general belief held by some policymakers: that the level of personal savings needs to increase for the country's economic growth to continue. Then the economist discusses a proposal recently put forward to encourage an increase in the level of savings: creating new savings accounts that earn interest tax-free until the money is removed.

The goal of such a program is obviously to encourage people to leave their money in these savings accounts, and the people pushing this proposal argue for it on the basis that it will increase the amount of money available for banks to loan. The economist responds by pointing to similar programs in the past and saying that these have not increased the overall level of personal savings: people just divert money from their old savings accounts into the new, tax-advantaged ones.

What the economist is doing here is basically using an analogy to suggest an implicit conclusion (there's no explicit conclusion in this stimulus). The implication is that because past programs like this have not increased the overall savings level, this program won't, either.

This doesn't mean the economist disagrees with the general idea that higher savings levels are needed to keep the country's economic growth going. He just disagrees that this program will achieve higher savings levels, and therefore rejects the reason provided by the policy's backers for why the policy should be adopted. If people aren't actually putting more money into savings, then banks won't actually have more money to loan, and the policy backers' premise is undermined.