Saturday, November 06, 2010

Bankruptcy of U.S. is Mathematical Certainty

John Allison, who for two decades served as chairman and CEO of 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. “I think the first thing we have to realize is where we’re going and to face it objectively,” Allison responded 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 if the government is to pay all the benefits it has promised through entitlement programs.

“If you run the numbers … the United States goes bankrupt,” said Allison. “It’s a mathematical certainty. … Now, countries don’t go bankrupt the way companies do. They don’t file bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina.”