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How Much Will The Oldster Tax Cost You?

Saturday, July 7, 2012 - 6:48 PM
By Scott Burns

Allow me to introduce the Oldster Tax. It is a tax for which there is no legislation. It is a tax that is not administered by the Internal Revenue Service. Instead, it has been imposed by the Federal Reserve, an institution that has the power to set interest rates.

The folks at the Fed don’t call it a tax, however. They call it a policy—ZIRP, for zero-interest-rate-policy.

http://assetbuilder.com/blogs/sco...st-you.asp
7
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,629
1. Saturday, July 7, 2012 - 9:02 PM
Shorebreak:  That is one fantastic article you posted and I have been trying to copy it and paste it on other sites so others can read it too.  However, it won't open up and shows "error".  I can't figure out what I am doing wrong.  I have never had this problem before.  Thanks for any help you can provide.  I couldn't even get it to work in an email to Elle who did the Petition. Below is what I am trying to post but it won't open:

http://assetbuilder.com/blogs/sco...st-you.asp

Yikes!  It opens from the Forum but can't be copied and posted any place else!  Do you know why?   Thanks!
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,091
2. Saturday, July 7, 2012 - 10:38 PM
It varies. There is no "one-size-fits-all" oldster. These articles are a tad biased to what "they" think "we" are.

Articles about "oldsters" tend to be written by "youngsters".
2
BozoBozo135 posts since
Feb 14, 2011
Rep Points: 917
3. Sunday, July 8, 2012 - 8:25 AM
Try this Paoli: http://assetbuilder.com/

Bozo: Scott Burns is far from being a "youngster" and "biased". Burns has been writing on this subject for years.  Besides, it would be impossible to write an article personally tailored to each individuals financial situation.
2
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,629
4. Sunday, July 8, 2012 - 8:28 AM
Bozo:  I decided this morning we are not "Oldsters", we are just "Aged Challenged".  Those youngsters who write those articles should be as tough as we have learned to be. ( They could get a lot of practice being a part of Ken's Blogs and Forums.)
2
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,091
5. Sunday, July 8, 2012 - 8:45 AM
Shorebreak:  Thank you sooo much for posting the second url.  It did work this time and I got it posted to Twitter and Facebook and also sent it to Elle.  I think this is an article more people need to read.  I really do appreciate your help and getting it to me so quickly. 
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,091
6. Sunday, July 8, 2012 - 10:27 AM
One comment: The article talks of the low interest rates being a double edged sword, one edge meaning that home buyers can buy a bigger house. Actually, that idea is VERY wrong and a fallacy that helps keep this policy in place.

In reality, you will be buying no different a house than you would with high interest rates. The interest rate doesn't help the buyer, it helps the seller! All the low interest rate means is that you will be paying a higher price than you otherwise would have paid. It is designed to prop up housing prices.

You see, the price the house sells for will be determined by the law of supply and demand like always. The lower interest rate merely allows the buyer to get a bigger loan, and so bid a higher price -- and thus, the house will sell for a higher price than it otherwise could have gotten. 

Low interest rates are NOT designed to help buyers and spenders; They are designed to help sellers. The policy is designed to make it so buyers will bid prices high enough that owners are not under water on their mortgages. That is, it is designed to bail out the very people who crashed the economy with their irresponsible spending in the first place! 

That is, we have been dragging this entire economic recovery out in an effort to protect the irresponsible people who speculated on housing -- whether individuals or Wall Street. If we would just let them crash -- as we would for people who speculate in the stock market -- we could get back to a level that is actually healthy rather than on endless life support. We could get to a point at which good economic behavior is rewarded, at which savings is a good idea and being responsible about how much you will pay is not a losing proposition. Instead, we are trying to get the economy -- prices in particular -- to stabilize at a level that is too high, is unhealthy. 
10
me1004me1004343 posts since
Jan 16, 2010
Rep Points: 2,357
7. Sunday, July 8, 2012 - 11:10 AM
me:  I think your post makes a lot of sense.  It is amazing the prices people will pay for a house nowadays with the "better get it while interest rates are low" mentality leading the parade.  Common sense plays no part in their thinking.
3
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,091
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