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

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posted on Jan, 19 2011 @ 07:00 AM
Caught this and ruined my evening news surfing.

( - John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told 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, 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 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.

Original Interview

The people who know are telling the congress and they aren't listening. We have no chance of saving ourselves with the current people in charge, hopefully we will wake up and actually make the changes needed to save the country.

posted on Jan, 19 2011 @ 07:28 AM
china needs to get their arses into gear and make the yeun the number one currency as when the dollar fails, many third world countries will also fail

posted on Jan, 19 2011 @ 07:54 AM
John Allison has provided a very similar tone to the warning that where around before the housing bubble burst. There where others who could see it coming, the warnings were well founded and eventuated. With the government not addressing the problems with the housing bubble, these problems have just grown and are looking at taking down the whole economy. The warnings in the economy are again coming and unless the regulators get a good slap in the face to wake up and face the reality, the next big crash will take down the nation.

posted on Jan, 19 2011 @ 08:14 AM
He's absolutely right. We need to concentrate on creating wealth, starting with closing all our military bases in other countries, bringing every single last one of our troops home, getting rid of the Bush tax cuts, seizing the assets of everyone caught using offshore accounts and levying large fines against them, simplifying the tax code, nipping rampant Medicare fraud in the bud. Doing all that would create wealth for the country by reducing our spending.

posted on Jan, 19 2011 @ 06:15 PM
i think most of the peope in the goverment are aware that we are going bankrupt... but they dont care it wont effect them because they are getting there share of the wealth they are steeling from the taxpayers...
and for the idea of getting rid of our troops... it sounds good but really war is about the only export we have any more and it is what is driving our economy today where would we put those people to work??? and without a strong military all the counrtys we have made mad will be knocking at our back door.... i think this train wreck will have to take its course....

posted on Jan, 19 2011 @ 06:23 PM
reply to post by barkingdogamato

Here is the problem the government (or at least the people behind the faces) is involved with stealing our money and helping us become a third world country. They only care about there own power and wealth and don't understand the word sharing. See companies only care about their bottom line and not our bottom line. The problem is if they don't give us enough money to buy extra things besides food, rent, etc. then the US is doomed and all they want to do is cut cut cut and cut some more until they show a higher profit than the year before not concerned with what that does to the rest of the US as long as they do good. Just like the banks and all other big companies. In the end that will be our downfall and with the government in there back pockets we are all doomed.

posted on Jan, 19 2011 @ 06:47 PM
I've said it before and I'll say it again, the people who saw it coming are still ignored, while the so-called professionals like the IMF, WTO, Central Banks and Government departments didn't see this coming.

That proves that these people are either intentionally destroying the financial system of the people and funneling wealth to the elites, or they are incapable of doing their jobs.

It's that simple, they are either corrupt, or incapable.

At the very least they should be removed from their positions for incompetence. At most they should be arrested and charged with corruption.

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