Rounding the home stretch

The beginning of the new year finds the crew completing the ceb wall sections to the proscribed heights at either end, 8 feet and 11 feet, and prepping to lay the wood bond beam. We chose wood over concrete for cost reasons, weight reasons and in the interest of simplicity. The blocks took the screws beautifully and provided very impressive anchoring. Which is not really surprising when you see the cross section of a block in the picture below. The block was cut with a miter saw and a wood blade. Not a happy moment for the blade, but an effective means of cutting bevels in the blocks for our sloping side walls.




With the bond beam in place, the roof rafters started taking shape. We have very deep overhangs specified for the roof, 3 feet over the short end of the structure, 4 feet over the front, and 2 feet to either side. This will help protect the building from the elements and provide a lot of shade around the walls. We're a hot humid climate zone so the shading is an important part of the passive cooling program.


Final roof details were worked out today and yours truly, the solar chimney man, just had to find a way to put all that great summer heat to use COOLING the structure. More details to come as that unfolds. 


The guys working on this project are developing some great skills and are showing talent in executing a loft style ceb structure. With the roof structure complete tomorrow, plastering can begin in earnest. A subject worthy of a post in and of itself. We'll be using a traditional lime and clay plaster ammended with nopales cactus "juice" which provides a natural latex to the mix. I haven't personally seen it, only had reports of how beautiful it looks. Looking forward to that part.


Who Needs a Gym Membership?!

Each of one of the compressed earth blocks used in this project weighs about 26 pounds. At approximately 48 blocks per linear foot on an 8 foot high wall section that calculates out to 1,248 pounds per linear foot. The rear wall of the building will be 8 feet high, the front 11 feet high in sections with the side walls sloping to meet the front. I don't know what a similarly sized building of conventional stick frame construction would weigh, but I doubt anything close to the 60,000 pounds or so of weight this build will!

Something that weighs so much deserves a name I think....perhaps "la casita ocho" would be appropriate given it's location behind old fire station 8. Or maybe even "la gordita!"

It's no wonder then that our intrepid crew is tired and sore at the end of a long day of block wall construction. I've joked with them that they need to star in that gym commercial where the guy simply says, "I pick things up, I put them down!" 

You can see the crew below hard at work putting the walls up in earnest......

...with great progress toward our first goal of an eight foot wall section.


Through trial and error the guys put together an optimal system of material handling, block making, equipment positioning and wall construction. Lots of detailing decisions were made as the door and window sections were added..then removed...modified...and replaced. You can see one of the retrofits between the door and window bucks. We had originally placed a pilaster between the door and window of 2-3 blocks wide. That detracted from the loft style look we were after so the command came forth to remove the pilaster, bring the window buck closer to the door and to leave just enough space for a dual light switch. Easier said than done! Removing the blocks that had been set in place with slurry proved to be one heck of a task a mere hours after they had been set. It was a true testament to the solidity of this construction methodology. They succeeded in the task and found that a block laid on edge between the door and window bucks provided just the right amount of space for the light switch and preserved the integrity of the building shell in terms of it being all compressed earth block.

But what would any job be without equipment failure?! The bobcat blew a hydraulic line late in the day, slowing block production. The bobcat has proven to be an indispensible tool in moving and working dirt, then bringing it to the block press. Men or age old calculation! In this case, we love the bobcat!

And with the setting sun, we find Robbie, boss of the job, still hard at work towards his goal on the rear wall section. This section has the western exposure and will carry the greatest heat load. My intention is to set the fresh air intake grills in the corners on the floor on the western wall. I'm no engineer, but with solar chimneys at the roof peak on the eastern exposure I'm betting on very effective drafting of any heat that manages to find its way through 12 inches of compacted earth on this wall. Other passive cooling concepts will come later with landscaping. The pecan tree behind will also provide significant shading. In fact, so much so that mounting solar panels on the roof would likely not be a possible energy strategy for powering DC fixtures, something we had considered for research.



Solar Chimneys and Earth Architecture

It was my curiosity about passive cooling that brought me to earth architecture in the first place. A particular interest of mine in researching passive cooling is the concept of the solar chimney. It's a feature we will include in our test structure. One great solar chimney example brought to my attention is at the Hawaii Gateway Energy Center. In fact, it's not AT the center, but integrated INTO the building of the center itself. You can read more about the concept deployed here:

Solar chimneys and Persian wind catchers (bagdirs) are certainly nothing new. In fact, I saw a great example of a wind catcher at the Cal-Earth institute a couple of weeks ago on a visit to their site. I didn't expect to see that as part of their demonstration project and was thrilled to see a working example. Unfortunately I was there in winter and didn't get to experience how it functions in the desert heat. Our guide at the center, however, indicated that it worked extremely well to circulate a cooling breeze in the summer.

Our own Firehouse 8 has a superb set up for several solar chimneys and we'll certainly be integrating those into the passive cooling strategies planned for the building. Large ceiling mounting gas heaters used to warm the truck bays have been removed and we will be improving the vent pipes that lead to the roof to create natural convection of warm air off of the ceiling and out of the building.

Drawing hot air out, implies drawing COOL air in. That is the major design challenge we face. The Hawaii center illustration is a clever use of cold water and is a very interesting design. Simple earth tubes have been considered (nice write up here: but are generally discouraged for hot humid climates.



Watch for future updates on our solutions in this arena. The appeal of being able to draft a lot of fresh air indoors and improve air quality while cooling is very appealing!

Walls Begin

Today we begin actual block production and laid the first few courses of blocks. After solving our dirt supply challenge (who woulda thunk it), the team got into a smooth rhythm. One of the objectives in this exercise is to train the team in all aspects of block making and block making, in addition to proper techniques for laying the blocks, working the slurry and blocking for door and window openings. It was an impressive start under Robbie's confident leadership and with technical assistance from the grand master himself, Lawrence Jetter. In many ways, today felt like a lot of prep, material staging, initial training and some baby steps into details that will serve us well for having practiced in preparation for the larger multi family project scheduled for first quarter 2012.

For this project we chose to use what I would refer to as a "purist" approach: unstabilized blocks, a very traditional slurry and final plaster coats with a lime plaster (more details as we begin that phase.) We had contemplated using a traditional Mexican green roof on the project but opted not to in order to practice the actual roof line and overhangs we have planned for the multifamily project, and after our calculations indicated approximately 60,000 pounds of weight attributable to the roof alone. A nervous construction crew convinced us that more advanced engineering would be in order for that!

Tomorrow sees an expanded work crew and block production in earnest...full steam ahead!

Messy, messy...

It's a bit of a mess on the site for the test "shack" due to rain, but I'm not complaining because we NEED the rain! Trenches were completed yesterday, and today the gravel was filled and railroad ties laid out. Decking is next and this afternoon we should see our first blocks rolling off the press!

The Beginning

Where to begin a new blog theme? After years of research, study, development and planning, the first earth architecture projects are finally coming out of the ground! I started this blog to begin to document and share both the research effort and its results and the actual physical manifestations of my interest in earth architecture.

This interest originated with a question: "isn't there a better way to cool our homes and offices in the heat of the summer? What about controlling humidity?" And so it began.

This may be a bit like watching a movie that transpires in the present with flashbacks to the past. Today, we officially launched our building process with compressed earth block on a test structure. This test structure was designed to be a scale model to test detailing for our 14 unit apartment complex planned for quarter 1 2012. This will be San Antonio's first and only compressed earth block multi family structure. This test "shed" is designed to look like this:

The first step is to set the foundation. We will be using a dual footing foundation which was widely used by Frank Lloyd Wright and which he referred to as a rubble foundation. More details on that to come on a future blog post. The foundation trenches were dug at twice the width of the supporting beams and will be back-filled with one inch gravel. The extra width will help in ensuring proper drainage away from the building.



More posts to follow as the project unfolds over the next two weeks. I generate a great deal of interest around our efforts to build "green" and energy efficient using what some refer to as "post industrial architecture."


Euro Crisis or Catastrophe?

This graphic from Stratfor just about sums up Europe's dilemma. Or should that read Germany's dilemma. As a student of German history I've long believed Germany was the key to the course of European history. But who would have imagined that to unfold to this extent? And who will exploit this crisis most? China? Russia?


KAM Approved for Firehouse 8

We were approved to day by the San Antonio city council on a purchase for historic firehouse 8 at 2323 Buena Vista. This is a win for us, the city and the westside community as we bring a nice infill redevelopment project to an up and coming part of San Antonio. Stay tuned for more details!

Warning: Insanity in the Air

This from John Mauldin: "According to Bloomberg and The Hill, Barney Frank plans to submit a bill that would remove the votes of the five regional Federal Reserve presidents from the 12-member Federal Open Markets Committee (FOMC), which sets interest rates, and replace them with five appointees that would be nominated by the President and confirmed by the Senate.

Frank says "he is concerned that the process is undemocratic because the regional Fed presidents are not elected or appointed by elected representatives, and he believes that regional Fed presidents are overly likely to focus on guarding against inflation at the expense of more adequately tackling the country's unemployment crisis." (US News and World Report)

Basically, he wants the Fed to be subservient to the politicians. Under his proposal, the FOMC could lose what independence it has in a short time. This is part of a strain of thought that suggests that the decisions that affect all of us should be made by a few elite people who purport to understand what is going on, which coincidentally are government insiders and the academics who foster their agendas.

How did Weimar and other hyperinflation incidents occur? When power was in the hands of a few well-intentioned elites who did not understand the long-term consequences, or were acting in self-interest without transparency or any check on their decisions. The Fed is designed to be a system of checks and balances, with no one president getting to appoint all the governors (they have 14-year terms), in order to try to remove the process as much as possible from political interference. That does not mean they will make the right decisions, but in this I agree with the alarmists: history suggests that without some constraint (gold standards as an example) hyperinflations may occur."

Students of history will understand that we Americans make a lot of our economic decisions with a great sensitivity to the trauma of the Great Depression. Germans, on the other hand, have a a tremendous sensitivity to unemployment and hyperinflation. Governments are historically fond of inflating their way out of debt problems. This also amounts to a confiscation of wealth from private citizens! Citizens....resurrectio!

Debt and Financial Repression

The debt levels seen throughout the world, both sovereign and personal balance sheets, while in some ways unprecedented,  is not something that hasn't been seen before. However, these debt levels are typically associated with major wars.

So how have economies historical "righted" themselves from debt levels of this magnitude? There have been three primary elements:

1. High Growth

2. High Inflation

3. Financial Repression

High growth is, I think, self-explanatory. And while that is true, policy makers seem befuddled as to precisely what steps to take in order to achieve such growth. In the U.S., we appear to be in a tug of war between "government does it best" advocates and "the private sector does it best" advocates. I suspect that means a blend of the two is what is needed.

High inflation is also self-explanatory. The U.S. government tells us we don't have meaningful inflation in our economy. Can I see a show of hands of those who think otherwise? I thought so!

Financial repression is, I believe, the least understood of the three paths to debt salvation. Wikipedia defines financial repression as "a term used to describe several measures which governments employ to channel funds to themselves which in a deregulated market would go elsewhere." I highly recommend a quick read of the Wikipedia entry as financial repression is certainly underway as defined there.

On a more basic level, financial repression will punish savers. Case in point, if you've been fiscally responsible and saved over the years, what are your fixed income options today? What rates are being offered? Are the real rates a positive return after taxes and inflation? One of the key tools of financial repression is explicit capping of interest rates on government debt. Didn't the Federal Reserve announce just last week that they would be keeping rates low for the next two years? That certainly sounds like interest rate control to me.

Financial repression is simply another form of taxation without the political heat. I fear this will be a feature of our economy for many years to come and investors should prepare themselves for this. I believe a cornerstone strategy for any portfolio should be to seek higher interest rates in private debt markets with instruments backed by real assets as an inflation hedge.

Getting Back to Even


Last week's wild market ride sparked more than one conversation about not only recent market action, but the markets and returns since this bear market cycle began in 2000. Watching gut-wrenching declines, punctuated by seemingly strong rebounds, only to be followed by more steep declines, prompted me to visit one of my favorite risk management topics: the importance of minimizing losses when investing.

"In order to make money, you must first not lose money" George Soros

No matter your investment style or approach, being mindful of what's referred to as "drawdowns from peak" is very important That's a fancy way of saying losing money relative to how much your portfolio has grown to over time. 

Say your portfolio started at $100,000, grew to $500,000 then subsequently declined to $300,000. Are you up $200,000 or down $200,000? When examined from the perspective of drawdown from peak, you're down $200,000. I prefer this method of determing progress in wealth management.

"You cannot get ahead while you are getting even." Dick Armey

After steep market declines, investors often underestimate what it takes just to get back to even. The following chart illustrates how advances required to get back to even grow geometrically as it relates to losses:

% Loss of Capital

% of Gain Required to Recover






















The periodic deep declines in the S&P 500 since the beginning of this secular bear market, which I believe began in 2000, have challenged investors to stay the course and certainly required iron nerves to give their portfolios the opportunity to get to "even." So how has that worked out?

From January 1, 2000 through today, it's been quite a harrowing ride to be invested in the S&P 500. The statistics below show just how frustrating the experience has been. Choose your method for risk management and stick to your discipline!

Start date


Start price


End date


End price


Number prices


Total gain or loss (Start date to End date)


Annualized gain or loss (Start date to End date)


Total dollar value for $1,000 purchase made on Start Date


Total gain or loss for all possible returns


Number returns


Number profitable returns


Percent profitable returns


Number unprofitable returns


Percent unprofitable returns




5 Rational Constitutional Ammendments

State Senator Jeff Wentworth addressed the Downtown Rotary Club of San Antonio today and laid out 5 key amendments he feels will bring real and positive change to the United States:

1. Term limits: 12 years for all members of congress.
2. Balanced budget
3. Line Item Veto for the President
4. A 2/3 majority of states required to raise the debt ceiling.
5. The ability to repeal an act of congress with 2/3 of states' approval

He went on to say that of the two methods provided for in the US constitution to enact amendments, only one has ever been used. The second, an article 5 convention, should, in his opinion, be called for. Such a convention would allow the states, with a 3/4 majority to propose and approve the five amendments listed above.

Great outside the box thinking and kudos to Senator Wentworth.

A New Twist? Markets Driving Politics?

Traditionally, investors have seen Congress act and the markets react. But watching market action over this summer one has to wonder if now we have markets acting in an attempt to get Congress to react? Is this why we've seen such a sharp selloff in equities around the world in a flight away from risk assets? Is this a 2008 style meltdown all over again?

To be sure, we have plenty of challenges in the US economy:

1. GDP growth reduced to near 0%
2. negative real consumer spending the past two quarters
3. the economy flirting with a double dip recession
4. an S&P downgrade of the U.S. credit rating
5. weak national housing market
6. weak consumer balance sheets (too much debt)
7. weak construction demand (a key driver in most recoveries)
8. unemployment above 9%.

And that's just the US! Add Europe's woes to the picture, which many contend are far worse, and, well, you get the picture! The result has been panic type moves based on investor fear that unfolds as they witness political leadership which looks dysfunctional.

But there are four good reasons to not panic and sell, and perhaps some great reasons to consider increasing equity exposure in portfolios:

1. Valuations. US corporations are putting up great earnings numbers and have exceptionally strong balance sheets even relative to better economic times. There are many ways to value markets, P/E ratios etc. Do your homework and decide if you think US stocks represent a great buying opportunity.
2. Emerging markets. Rapidly growing emerging economies are also a big part of the US corporate profit picture. We're players globally, not just at home.
3. Deleveraging. The process that began in 2008 continues and household balance sheets are in fact improving. Yes, more progress is needed but progress has occurred!
4. Housing. Working off excess housing inventory remains a challenge, but affordability of housing is at an all time high. New permits are running at half the household formation numbers indicating absorption of housing at a decent clip. If we can just get the jobs engine going, a real improvement could be just ahead.

I'll add one final observation drawn from years of personal experience observing and trading markets. Check your own pulse. If you're anxious and nervous, others likely are too. It can pay handsomely to do the exact opposite of what you FEEL like doing. As John Templeton once said, the best time to buy is when there's blood in the streets.

Perhaps this time it IS different. Perhaps we have capital markets pushing politicians to craft real solutions and to do what's needed to get the US economy back on track and headed in the right direction!

4 Factors Behind an Innovation Economy

Jonathon Avidor of the Northwestern University School of Law and the Kellogg School of Management recently published a timely paper that contained a thorough survey of the leading academic ideas regarding preconditions for encouraging innovation in a nation's economy  by examining the preconditions for Israeli innovation over a 30 year period. His review considered: public R&D grants, human capital acquisition, intellectual property rights, financial reforms, venture capital policy and cultural factors.

The paper also lends fresh empirical support to the notion that these factors can be emulated and distinguished by other governments and organizations (ie. deliberate policy-making or responses to market indicators) and can be distinguished from those which resulted from historical chance (ie. luck). Key public policy lessons and limitations of innovation policy were also discussed.

I'll summarize the conclusions of the paper as follows:

The emergence of an innovation economy requires proper alignment of key factors:

1. economic incentives,

2. access to financial capital,

3. skilled human capital, and

4. unrestricted access to information.


And here's a key point: "Over a 30 year period, Israel created or acquired these necessary building blocks through a combination of focused R&D policies, immigration dynamics, robust education and military training infrastructure, financial reforms, venture capital policy and cultural factors."

Further: "...intelligent policy-making in pursuit of strategic objectives and responses to market conditions combined to play a crucial role in combating market failures and promoting innovation. As a result, important lessons can be learned from the Israeli experience in acquiring each of the four required factors for building an innovation economy."

Israel created proper economic incentives for innovation by: 

  1. reducing the cost of capital through financial reforms and direct R&D support, leading to an increase in the expected value of innovation to inventors; 
  2. increasing the appropriability of inventions by strengthening local intellectual property protections and foreign reciprocity, effectively increasing the expected value of innovation to inventors; and 
  3. increasing the probability of success by providing resources for new entrepreneurs, further increasing the expected value of innovation to inventors.  

Israel developed adequate access to financial capital by:

  1. providing direct R&D grants to industry in a horizontal and neutral, market-led fashion in order to bridge the funding gap caused by information asymmetries, leading to the development of a critical mass of technological advancements and startups; and
  2. building a venture capital industry to provide growth capital and management expertise for startups which have reached the marketing/growth stage.

Israel acquired and developed sufficient human capital by: 

  1. building a large network of academic institutions that were responsive to industrial needs; 
  2. encouraging immigration of skilled engineers and scientists to increase the pool of qualified innovators (perhaps benefitting from a bit of historical luck);
  3. and facilitating an efficient military-civilian transfer of skills and know-how.

And finally, Israel provided adequate access to information by: 

  1. sponsoring knowledge intermediaries, conferences, consortiums between industry and academia, foreign participation in pre-competitive knowledge generation and comprehensive databases with shared information; and 
  2. facilitating an efficient military-civilian transfer of knowledge and technological progress.


6 Benefits of Commercial Real Estate as an Alternative Asset Class

With traditional capital markets trying the patience of investors, and savers being penalized by historically low interest rates designed to help recapitalize bank balance sheets, I often get questions about the role of commercial real estate as an alternative asset class for investors. Here, then, are 6 reasons to consider adding commercial real estate to your portfolio:

1. Non-correlation to stock and bond markets

Non-correlation simply refers to the fact that real estate does not fluctuate in value in tandem with stock and bond markets. True, bond yield movements (an inverse relationship to price) can impact real estate prices as they provide benchmarks for bank lending rates. However, there is not a 1:1 correlation to those markets and this is where commercial real estate can provide enhanced diversification as an alternative asset class. It can provide a hedge against declining asset prices and represents a longer term "support" to capital values.

2. Income

Businesses and retail tenants can generate income for you from leases. After operational expenses and the mortgage are paid, there hopefully is residual cash flow to you, the owner.

3. Depreciation

Depreciation represents a tax write-off of some or all of your income which reduces your overall income tax burden.

4. Equity Growth

As your mortgage balance is reduced, this represents an accumulation of equity for you. The tenants in your property pay down your loan for you.

5. Appreciation

Overall appreciation of your property occurs as rental income goes up, as the market assigns a highler value to your property income and as the value of the land goes up. Particularly in an inflationary environment, commercial property can provide an excellent hedge as rental income will rise with inflation.

6. Leverage

Although bank credit is tough to access in today's market, traditionally leverage means you can borrow a substantial amount of your purchase price to buy the property. Leverage allows you to control a large property for a small percentage of the value. For example, if you buy a property for $4, you may borrow $3 and add $1 of your own. If the value of the property goes up to $5 (a 25% increase,) and you sell it, $3 goes to the bank and $2 goes to you. That's a 100% rate of return to you on a 25% increase in value of the underlying property. That's a very simplistic example...but you get the point!

Consider commercial real estate as an alternative asset class to stock and bond markets. It can be a valuable component of your overall asset allocation strategy.

The Fed and Inflation

"It's not clear that we can get substantial improvements in payrolls without some additional inflation risk."

-Ben Bernanke, April 27, 2011

Those of us buying screws, nails, sheetrock and other primary construction materials know that the "additional inflation risk" has already come to roost. I believe inflation is being significantly under reported and maintain that of the three options to attack the Federal deficit, raising taxes, cutting spending or inflating our way out of the problem, our leadership will choose inflation. It's the most politically expedient and, of course, the most cowardly. It's also a transfer of wealth from you and I due to poor leadership!

Texas Economy Continuing to Outperform the National Average



The Texas economy continues to outperform the U.S. economy, according to the April Review of the Texas Economy from the Texas A&M Real Estate Center.

Assessing the period from March 2010 to March 2011, Texas gained 237,900 jobs overall, which is an annual growth rate of 2.3 percent. Over the same period, national nonfarm employment rose 1 percent.

The state’s private sector also exceeded U.S. figures, posting an annual employment growth rate of 2.7 percent compared with 1.6 percent for the U.S. private sector.

The state’s seasonally adjusted unemployment rate fell from 8.2 percent to 8.1 percent. The nation’s rate decreased from 9.7 to 8.8 percent.

All Texas industries except financial activities and information industries had more jobs in March 2011 than in March 2010. All Texas metro areas, except Abilene, Brownsville-Harlingen and Laredo, had more jobs. Odessa ranked first in job creation followed by Midland, Longview and Dallas-Plano-Irving.

Observers have consistently cited a business-friendly environment, low cost of living, low union affiliation and the lack of a state income tax as primary drivers for business growth in the State.

Healthy Texas Housing Market Bodes Well for Alternative Investors

 Texas housing markets are showing up again as stellar performers in the national housing market statistics. This time it involves new home construction. According to the Hanley Wood Market Intelligence Report, many Texas MSAs scored well above 50 out of 100 with 50 being the minimum to be considered a healthy market.

Here are some highlights:

Austin-Round Rock - 86.5, (second in the nation)

Houston-Sugar Land-Baytown - 77.3,

San Antonio - 75.6,

Dallas-Fort Worth-Arlington - 70.7

El Paso - 65.8.

Killeen-Temple-Fort Hood - 54.5

McAllen-Edinburg-Mission - 54.5.

The Hanley Wood index weighs housing conditions in the 100 largest home building markets based on the 2011 outlook for six key variables most associated with strong home sales. Those include unemployement rate, change in unemployment numbers, home price appreciation, household growth, job growth and median income growth.

7 Factors Limiting Entrepreneurs

1. Credit for small businesses in the US is practically non-existent
2. Businesses are being forced to scramble for needed investments, making do with cash flow and working out of profits.
3. 75% of the "rich" that will see the Bush tax cuts go away are small businesses.
3. All net new jobs of the past two decades have come from small businesses and start-ups.
4. And yet as of now, when structural employment is over 10% Congress wants to reduce the availability of revenues to the very people we want to be hiring new workers, and who are cash-starved as it is.
5. It is not just that taxes will go from 35% to just under 40%. It is the increase in Medicare taxes coming down the pike, too.
6. Congress wants to take money from private hands, where it has the potential to increase productivity, and put it into government hands, where it will do nothing for growth of the economy. There is no multiplier for government spending.
7. Tax increases reduce potential GDP by a multiplier of at least 1 and maybe 3, depending on which study you want to cite.

This is not a democrat or republican issue, this is real life. Before we get seduced into class warfare by the pundit spin on the economy, consider the facts. As with healthcare, finance reform, national security and immigration, the conversation is the right one. What emerges from our national leadership is something altogether different.

I understand that taxes have to go up. I get it. But we would be better off having a discussion of where we want to tax dollars to come from before we risk hurting an economy that will barely be growing at 2% in the 4th quarter, and may be well below that.


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Inflation? Deflation?

Currently the world is caught in a tug of war between deflation and inflation. The global economy faces powerful deflationary forces, which have induced equally powerful responses from governments around the world.  Governments have ratcheted up the creation of monetary reserves and increased public spending across the board. Much of the spending is unsustainable, and the monetary reserves may eventually become a problem, resulting in inflation. The outcomes are binary, and they are not good.

Policymakers have not even begun to deal with the problems. As Chairman Bernanke has pointed out, "A variety of projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy, show a structural budget gap that is both large relative to the size of the economy and increasing over time." He stated that "the federal budget appears to be on an unsustainable path." Those are strong words for a Fed chairman. I hope Congress is listening.