Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Professor & Former CEO of Nation's 10th Largest Bank

Video:  John Allison - Runs 2 minutes - More on the National Debt...

Great clip.  Quotes transcribed inside.

(CNSNews.com) - John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.

Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.

“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.

“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.

“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.

“Now, countries don’t go bankrupt the way companies do,” said Allison. “They don’t file bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina--unless we change direction. So, we absolutely have to change direction. And the irony of that is it requires an interesting combination. It requires both discipline, but it also requires a focus on growing our economy. And it means a fundamental philosophical change from where we are today, from the idea of redistributing wealth to the idea of creating wealth.”

In his interview with CNSNews.com Allison said that when belonged to the Financial Services Roundtable they examined Fannie Mae and Freddie Mac and determined they were going bankrupt. Congressional leaders, however, did not heed their analysis.

“I was on a committee, a Financial Services Roundtable, for nine years trying to do something about Freddie Mac and Fannie Mae,” said Allison.

“You couldn’t help but see it coming,” he said. “You ran the numbers, particularly the last several years, and it was mathematically certain Freddie and Fannie were going bankrupt.”

“We met with Congress. We met with [House Financial Services Chairman] Barney Frank and [Senate Banking Chairman] Chris Dodd and they absolutely wouldn’t see it,” said Allison.

Allison became president of BB&T in 1987 and was elected chairman in 1989. He remained CEO through 2008. He is now distinguished professor of practice at the Wake Forest University Schools of Business. By 2009, according to rankings done by SNL Financial, BB&T had grown into the nation's 10th largest bank.

• Read CNSNews.com's full interview with Allison

##

Allison: Give Young People Option to Get Out of Social Security

http://www.cnsnews.com/news/article/give-young-people-option-get-out-social

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Comments

[DailyBail]

Give Young People Option to Get Out of Social Security, Says Former BB&T CEO

http://www.cnsnews.com/news/article/give-young-people-option-get-out-social

[DailyBail]

Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank

http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica

[Dr. Pitchfork]

Allison was also a big opponent of TARP -- BEFORE it happened.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afxCLBycUdbc

And in this interview, Allison says that Bernanke (via Paulson) forced the big banks to take TARP money -- all so that they could hide the insolvency of 3 or 4 large banks.
http://bigthink.com/ideas/17843

[DailyBail]

great links pitch...both new to me...

[signalfire]

20 to 25 YEARS????? How about we're bankrupt NOW?

[DailyBail]

CAMDEN, N.J. – Some police officers are turning in their badges as part of deep municipal layoffs that began Tuesday and that could be a blow to the quality of life in this city, one of the nation's most impoverished and crime-ridden.

As many as 383 workers, representing one-fourth of the local government's work force, are expected to lose their jobs, including about half the police force and one-third of the city's firefighters.

http://news.yahoo.com/s/ap/20110118/ap_on_re_us/us_camden_layoffs

[DailyBail]

Hu Jintao's State Visit: U.S.-China Relationship in Focus

http://news.yahoo.com/s/time/08599204294100

[DailyBail]

Haitian police take ex-dictator out of his hotel

http://news.yahoo.com/s/ap/cb_haiti_ex_dictator_returns

[DailyBail]

Suicide bombing in Iraq kills 52 police recruits

http://news.yahoo.com/s/ap/ml_iraq;_ylt=AsQA1rDxGgBuKXtwIy883zW9F4l4;_ylu=X3oDMTJhb3RwMDNhBGFzc2V0A2FwLzIwMTEwMTE4L21sX2lyYXEEY3BvcwM2BHBvcwM2BHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDc3VpY2lkZWJvbWJp

[Diogenes the Distressed]

Alas, the distinguished gentleman missed the mark completely. With privately owned central banks issuing "money" as a debt based instrument, more money is owed than is in circulation right from the git go. Its all a vast scheme to turn bookkeeping entries into tangible assets, while turning Americans out of their homes. How can someone so smart as this fellow be so stupid? Easy! He doesn't "get it" because to do so would overturn his entire world view. Wake Up!!!

[signalfire]

Seems like this important a topic could have used more than a two minute sound bite. I don't trust 'news sources' that cater to such short attention spans. His quote, 'have to grow our economy' is code for 'debt based economy'. We've had plenty of that and this is where it's gotten us. We live on a finite planet; infinite growth is not possible and the interest on the debt only benefits the banksters, which is what this guy is.

[j r]

I can't see how it can be put off another 20 or 25 years. More like five years, tops. Even that's stretching it.

[john]

This is a damn shame.

http://www.mcclatchydc.com/2011/01/18/106949/study-many-college-students-not.html

Many of the students graduated without knowing how to sift fact from opinion, make a clear written argument or objectively review conflicting reports of a situation or event, according to New York University sociologist Richard Arum, lead author of the study. The students, for example, couldn't determine the cause of an increase in neighborhood crime or how best to respond without being swayed by emotional testimony and political spin.

[RedPorch]

Not necessarily...

http://3.bp.blogspot.com/_eeYt1gOHtiQ/TQL5PCxxzFI/AAAAAAAAASM/NSYKYbDqeQs/s1600/v131+Boy-clown+super-genius.jpg

[DailyBail]

the criticism is fair...there have been better clips posted on debt and deficit issues...