http://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.
Originally posted by whodeyJohn Allison fails to understand general equilibrium. The market won't let America fail. Worse case scenario interest rates begin to rise quickly, forcing most Americans to get involved (yes, even the middle class will care when they can't afford home loans, education loans, car loans).
http://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 pre by SNL Financial, BB&T had grown into the nation's 10th largest bank.
Edit: But yes, the US long-term fiscal picture is not ManBearPig. It's real. I'm super seriall!
Originally posted by telerionSo we have one vote that America is bulletproof. Any others?
John Allison fails to understand general equilibrium. The market won't let America fail. Worse case scenario interest rates begin to rise quickly, forcing most Americans to get involved (yes, even the middle class will care when they can't afford home loans, education loans, car loans).
Edit: But yes, the US long-term fiscal picture is not ManBearPig. It's real. I'm super seriall!
Originally posted by whodeyI think the next significant battle to be waged will be with currency and financial instruments, not bullets. Once China realizes how big its muscles really are in comparison to others, its just a matter of time before they flex them.
So we have one vote that America is bulletproof. Any others?
Originally posted by FreakyKBHDoes America have anything to fear militarily from China? After all, the US is sitting on a ton of nukes. However, like the former USSR, the demise comes from within. Did you read the article? Do you agree?
I think the next significant battle to be waged will be with currency and financial instruments, not bullets. Once China realizes how big its muscles really are in comparison to others, its just a matter of time before they flex them.
Originally posted by whodeyI started a thread a week or so ago about the Esquire Commission's proposal to balance the budget. You seemed to have no problems with it except for the gas tax (and you wanted the troops to be brought home even more quickly, but no one disagrees with you on that.).
http://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 pre by SNL Financial, BB&T had grown into the nation's 10th largest bank.
http://www.esquire.com/blogs/politics/federal-budget-statistics-1110?src=rss
In addition to balancing the budget by 2020, this proposal also allows Obamacare and the Bush tax cuts to remain in place. So instead of running around declaring that the sky is falling, why not directly support the Esquire Commission's plan? Or at least offer an amended version of it that you would support.
Originally posted by telerionNo austerity?
John Allison fails to understand general equilibrium. The market won't let America fail. Worse case scenario interest rates begin to rise quickly, forcing most Americans to get involved (yes, even the middle class will care when they can't afford home loans, education loans, car loans).
Edit: But yes, the US long-term fiscal picture is not ManBearPig. It's real. I'm super seriall!
http://en.wikipedia.org/wiki/Austerity
Originally posted by MelanerpesI think it no surprise that these are all FORMER legislators. No one currently in office has much of a plan other than to give tax cuts and say they want to repeal Obamacare. Deep down I think these guys know that they are just blowing smoke up their arse with such proposals. There is no way the powers that be will make such drastic changes.
I started a thread a week or so ago about the Esquire Commission's proposal to balance the budget. You seemed to have no problems with it except for the gas tax (and you wanted the troops to be brought home even more quickly, but no one disagrees with you on that.).
http://www.esquire.com/blogs/politics/federal-budget-statistics-1110?src=rss
In addi ...[text shortened]... Esquire Commission's plan? Or at least offer an amended version of it that you would support.
If you don't believe me, just look at the amount of time and energy it took to pass Obamacare. It took an entire government dominated by one party. To get the number of changes they listed would be next to impossible. Like the article said, we need both increased revenue and decreased spending. As the parties are structured now, one side opposes the tax revenue aspect and the other opposes the decrease in government spending. In effect, the two party system is part of the problem here as they both move us closer to oblivion.
If this plan were implimented today, I would have NO problem with it. I may not like certain aspects of it and I may prefer other ways to cut costs and would prefer to be even more aggressive, but the bottom line would be that at least someone is addressing the 100 pound gorilla in the room.
Originally posted by whodeyThe link couldn't be found. But yes, I believe we will implode from minimal outside pressure.
Does America have anything to fear militarily from China? After all, the US is sitting on a ton of nukes. However, like the former USSR, the demise comes from within. Did you read the article? Do you agree?
Originally posted by whodeyThe big problem right now is that it's become impossible for the parties to sit down, make tradeoffs, and come up with something they can agree on.
I think it no surprise that these are all FORMER legislators. No one currently in office has much of a plan other than to give tax cuts and say they want to repeal Obamacare. Deep down I think these guys know that they are just blowing smoke up their arse with such proposals. There is no way the powers that be will make such drastic changes.
If you don' ...[text shortened]... the bottom line would be that at least someone is addressing the 100 pound gorilla in the room.
And one of the big reasons for that is groups like the Tea Party. Do you think anyone in the GOP is going to ever be caught in the same room with Dems, let alone negotiate with them? They all fear that the Tea Party will clobber them if they deviate in the slightest from their demands. Any GOP who agreed to the Esquire Proposal would face a primary challenger denouncing the tax increases and the failure to eliminate Obamacare.
But it's good to see that unlike most Tea Partiers, you're actually willing to accept the compromises that are necessary to achieve the fiscal responsibility that you've been calling for. But I fear that if word gets out about what you just posted here, the Tea Party might officially expel you from the movement.
Originally posted by MelanerpesIn all fairness the Tea Party did not create this mess. Therefore, to blame them for anything is beyond fair. In fact, they have just begun their fight.
The big problem right now is that it's become impossible for the parties to sit down, make tradeoffs, and come up with something they can agree on.
And one of the big reasons for that is groups like the Tea Party. Do you think anyone in the GOP is going to ever be caught in the same room with Dems, let alone negotiate with them? They all fear that the about what you just posted here, the Tea Party might officially expel you from the movement.
Hopefully after two rounds of elections the progressives will get a one way ticket home from both parties and the fiscal sanity can begin. Otherwise, it will be business as usual. Of course, there is always the chance that the Tea Party will play the same games. If so, guess the country goes belly up.
Originally posted by whodeyBut the progressives aren't the ones losing elections - its been almost entirely the conservative democrats in districts that voted for McCain in 2008. So the past election simply dumped out a bunch of centrists, and Congress is now made up mainly of true believers in both parties. The prospects for compromise are unlikely.
In all fairness the Tea Party did not create this mess. Therefore, to blame them for anything is beyond fair. In fact, they have just begun their fight.
Hopefully after two rounds of elections the progressives will get a one way ticket home from both parties and the fiscal sanity can begin. Otherwise, it will be business as usual. Of course, there is a ...[text shortened]... the chance that the Tea Party will play the same games. If so, guess the country goes belly up.
I do believe that sanity will eventually prevail - but it will likely be in spite of the Tea Party, not because of it -- at some point, the Wall St investors that you hate so much will decide it's in their own best interest for the federal government to be fiscally stable and will use their power to force members of Congress to agree on something.
Originally posted by telerionthe market wouldn't let lots of countries fail that did, i bet.
John Allison fails to understand general equilibrium. The market won't let America fail. Worse case scenario interest rates begin to rise quickly, forcing most Americans to get involved (yes, even the middle class will care when they can't afford home loans, education loans, car loans).
Edit: But yes, the US long-term fiscal picture is not ManBearPig. It's real. I'm super seriall!
http://en.wikipedia.org/wiki/Tulip_mania
Originally posted by Metal BrainI think that both you and whodey are confusing the point of my post. The market forces austerity before the numbers in the OP can be realized. At some point before those numbers are reached the demand side for US debt dries up, causing interest rates to rise. Then the game is up.
No austerity?
http://en.wikipedia.org/wiki/Austerity
Edit: And a preemptive "No," to all those here who disagree with me as a principle. I'm not implying that the correction that the market forces will be easy.
