While countries like China, Brazil and India are on the path to ascendency, the United States appears to be heading in the opposite direction, according to the former CEO of a major U.S. bank.
In a segment on the Jan. 7 broadcast of the Fox Business Channel's "Stossel," John Allison, the former CEO of North Carolina-based BB&T Corporation (NYSE:BBT), the 10th largest bank in the United States, warned of dark times ahead if the country continues on its current course.
"Now, it's a long-term trend," Allison said. "We will have some kind of economic recovery and we'll have some economic growth. I think the most likely intermediate scenario is stagflation like the 1970s."
Allison pinpointed several entitlements that will prove to be huge liabilities for the country, as well as other structural problems with current policy.
"But if you run the numbers on the deficits we have in Medicare, the deficits we have in Social Security, the operating deficits which are over a trillion dollars a year now, and how you undo those is unclear," Allison continued. "We have a dysfunctional foreign policy. We have a real big demographic problem because of the retirement of the baby boomers and that's going to reduce productivity, the big demographic problem. And we have a failed K-12 education system."
And Allison estimated that by the 2030s, the U.S. will suffer from the pending "third-world" crisis. He suggested the country adopt a more Ayn Rand-like approach to governing.
"In 25 years, the United States will be a third-world country if we don't change direction," Allison said. "And ironically, we need to go exactly opposite of the way we're going. We need to return to the ideas that made America great - life, liberty and the pursuit of happiness, each individual's right to their own life."
Allison said education is a key to success, but our behemoth bureaucracy fails to educate because it lacks the discipline of the markets.
"I think if you look at the success of our education system, you got to start worrying about that," Allison said. "I'm a huge advocate of education because I think the real source of all human progress is the human mind. But educational systems need competition and discipline. We in business - we talk about being innovative. We don't really like to be innovative. We're forced to be innovative by markets. We have a government-run monolith. It is not going to be innovative, it is not going to be creative. And people are wrong to view privatization of education like private schools today. What we really need are about 10,000 experiments of which 9,990 would fail, which is what happens in business all the time. Business failures happen all the time."
Allison retired as the BB&T CEO in 2008 and remained on the BB&T Board of Directors through the end of 2009.