Bankruptcy of US mathematical certainty
09 Nov '10 01:12http://cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathmatica
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 "mathmatical certainty" that the US government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the US 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 are 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 US goes bankrupt," said Allison. "It's a mathmatical certainty. It reminds me very much of the 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 US 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 is it requires an interesting combination. It requires both discipline, but it also requires a focus on growing our economy. And it means redistributing wealth to the idea of creating wealth.."
In his interview with CNSNews.com Allison said that when belonged to the Financial Services Rountable 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 Rountable, for nine years trying to do something about Fannie Mae and Freddie Mac," said Allison.
"You could not help but see it coming," he said. "You ran the numbers, perticularly the last several years, and it was mathmatically certain Freddie and Fannie were going bankrupt."
"We met with Congress. We met with Barney Frank and Chris Dodd and they absolutely would not see it," said Allison.
Allison became president of BB&T in 1987 and was elected chairman in 1969. He remained CEO through 2008. He is now distinguished professor of practice at 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.
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 "mathmatical certainty" that the US government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the US 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 are 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 US goes bankrupt," said Allison. "It's a mathmatical certainty. It reminds me very much of the 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 US 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 is it requires an interesting combination. It requires both discipline, but it also requires a focus on growing our economy. And it means redistributing wealth to the idea of creating wealth.."
In his interview with CNSNews.com Allison said that when belonged to the Financial Services Rountable 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 Rountable, for nine years trying to do something about Fannie Mae and Freddie Mac," said Allison.
"You could not help but see it coming," he said. "You ran the numbers, perticularly the last several years, and it was mathmatically certain Freddie and Fannie were going bankrupt."
"We met with Congress. We met with Barney Frank and Chris Dodd and they absolutely would not see it," said Allison.
Allison became president of BB&T in 1987 and was elected chairman in 1969. He remained CEO through 2008. He is now distinguished professor of practice at 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.
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