I believe in the coming recession.  It will come after two years of the Hillary/Osamabama administration. 

This guy is an economist? All I can say is OMG! Does that nitwit not see the difference between a stock and a house? I'll give him a hint.....you can live in one of them. A home will always have value whereas a stock may not. We can handle a "burst of the bubble" for that very reason. To have someone that intellectually stunted being a part of government scares the hell out of me.

We've finally given liberals a war against fundamentalism, and they don't want to fight it. They would, except it would put them on the same side as the United States. Ann Coulter

Root of the Bubble(s) or is it Bubble(ic). 

Let's quote a favorite economist of the liberal media - well, a favorite when he is marching to their drum beat. The progressive economist, Dean Baker of CEPR, in a May 2003 piece while reflecting back at the last gasps of the Clinton era, explained (emphasis throughout is mine): 

The Clinton boom was built on three unsustainable bubbles. One of them, the stock bubble, has already burst. The other two bubbles—the dollar bubble and the housing bubble—are still with us. The dollar bubble is starting to deflate, and the housing bubble is perhaps just now reaching its peak. These bubbles created the basis for the 2001 recession and the economy’s continuing period of stagnation...

The triple bubble economy of the late ’90s presents the most difficult set of economic problems since the Great Depression.

 This dangerous triple bubble economy  - the hallmark of the Clinton years of prosperity - were comprised of:

Stock Market Bubble - The stock market bubble added more than $8 trillion of paper wealth to the economy. This stimulated the economy in two ways. First, when families see the value of their stock portfolios rise, they spend more, since they feel less need to put money aside for retirement or their kids’ education. Just as the textbooks would predict, consumption boomed and savings fell through the floor in the late ’90s and 2000...  The bursting of the bubble threw this process into reverse... The ’90s stock bubble is also partially responsible for other recent problems. One is the switch from surpluses to deficits at both the federal and state levels. The federal government collected almost $120 billion in capital gains tax revenue at the peak of the stock bubble in 2000, most of which came from gains on stock sales. When stock prices plunged, capital gains revenue did also. It is now projected at $51 billion in 2003. Many states, especially California, were similarly affected by the stock crash.

The wave of corporate accounting scandals was also an outgrowth of the bubble.. 

The Housing Bubble – As was the case in Japan in the ’80s, the stock market bubble of the late ’90s was accompanied by a housing bubble. The rise in home prices since 1995 has outpaced the overall rate of inflation by more than 30 percentage points. This sort of run-up in home prices has no precedent in the post-war era. The surge in home prices has created more than $3 trillion in new housing wealth, as compared to a situation in which home prices had just kept pace with inflation.

Like stock wealth, housing wealth also spurs consumption. Families see the rising value of their homes as a source of wealth that they can draw upon to meet their needs. They have been drawing on this wealth with a vengeance in the past two years, as plunging interest rates have led to an unprecedented surge in mortgage borrowing. As a result, the ratio of mortgage debt to home equity is at near-record highs.
This situation is frightening for two reasons. First, as a short-run matter, if housing prices fall sharply in some of the areas where the effects of the bubble are largest (for example the Boston, New York, Washington, and San Francisco areas), new home buyers (and those who recently refinanced their mortgages and took money out) could find they have negative equity in their homes. If someone borrows $270,000 to buy a $300,000 home, and the price falls by one-third, this leaves them owing $70,000 more than the home is worth. When this happens, there is a huge incentive to just let the mortgage holder foreclose on the home. If this were to happen on a large scale, the survival of many banks and financial institutions would be at risk.

The current high levels of mortgage debt are a problem for another reason. The population is aging, and many families are getting near retirement. With the front end of the baby boomers approaching 60, many homeowners should be near to paying off their mortgage. The demographics indicate that mortgage debt should be lower than it has been in prior decades. But on the contrary, many baby boomers are likely to hit retirement––after having just lost much of the wealth in their 401(k)s due to the stock market crash––and discover that their homes are worth much less than they had expected. These older baby boomers really need to be saving to ensure themselves a sufficient income in retirement, but the illusory wealth created by the housing bubble is preventing them from recognizing this fact.

While the housing bubble has its own logic, it is an outgrowth of the stock bubble. It began as a result of people using their newly created stock wealth to purchase better homes. This started home prices on an upward path, leading people to buy homes in anticipation of continually rising prices. The bubble will persist as long as people expect home prices to rise. When they lose this expectation, housing prices will fall back to more normal levels.

The Dollar Bubble -  To make matters worse, a third bubble from the ’90s is also still with us––the dollar bubble. The Clinton administration deliberately pursued a “strong dollar” policy. This had the desirable short-term effect of restraining inflation and raising domestic living standards by making imports cheaper for people in the United States. (An undesirable short-term effect was the devastation of U.S. manufacturing.) However, in the long-term, the strong dollar policy is unsustainable. As a result of its massive bill for imports, the United States is currently borrowing more than $550 billion a year from abroad

A note to the media: In your continuing effort each and every year to predict your gloom and doom and to blame it all on the Bush administration, why don’t you do your homework, and follow the bouncing ball as to how the recent history actually played out. The MSM likes the economics of Dean Baker. Why don’t you explain his views to the public when it rains on your parade?

 Once again:

The triple bubble economy of the late ’90s presents the most difficult set of economic problems since the Great Depression. The solutions are neither simple nor painless, but—just as was the case with the New Deal—big problems can open the door to big solutions. 

Question to the media: So how did President Bush do with this “most difficult set of economic problems since the Great Depression,” which he inherited from the Clinton era?

I just turned off my subscription to garbage from NewsMax because they have been reporting an impending housing crash non-stop for months, and now they've added a prediction that buying gold will be the only way to hold your own in the impending crash of the dollar and worldwide recession. I read a book about 6 years ago, which was written in 1981, by an author who was absolutely certain that by the end of the 1980's, the US would be swallowed up by triple-digit inflation and anyone not holding gold would be starving to death because they wouldn't be able to afford a slice of bread. It was quite funny, reading that in 2000! There was no room for doubt, in that book. Yet here we are. There are a large contingent of folks out there whose living depends on making the public believe the warm light shining down on you is a falling meteor, for any number of possible reasons, Global Warming not the least.

Lee T.

U.S. Navy (ret.) / Hillsboro, Oregon

I have enough money to last me the rest of my life. Unless I buy something.