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Why Bureaucrats Shouldn't Set Interest Rates

March 13, 2012 by Four Percent

Ira Stoll, Reason When I was collecting my annual tax forms to send to my accountant earlier this month, I couldn’t find one — the one called the Form 1099-INT. That’s the form I’ve gotten in past years from banks or mutual fund companies to report interest I’ve received on bank accounts or money market funds. The form didn’t seem to be downloadable from the bank or mutual fund Web sites, either, so I finally called up and asked a call center representative where my form 1099-INT was. Wearily, she explained that the bank doesn’t have to issue the form if an account generates less than $10 in annual interest. Lots of other callers, she said, had been asking the same question, and getting the same response. It’s not that I have less money in the bank than I used to. Okay, maybe a little less. The point, though, is that the Federal Reserve’s zero interest rate policy—“zirp,” for short—means that whatever I do have in the bank isn’t generating much interest. And that’s part of the reason I’ve got less money in those bank accounts. Read More