Interest rates, inflation and unemployment all are low by historical standards and the economy is responding as one would expect.

When Fortune 500 companies reported first quarter earnings this year, fully 67 percent beat Wall Street analysts' expectations, Nelson said.

Add to that the recent bull run in the stock market and a healthy world economy and the prospects for a prolonged economic expansion look good.

With all the talk of the crisis in subprime home mortgages, one might think the opposite. But Nelson pointed out subprime constitutes a small portion of the home lending market as a whole.

And subprime lending is done with the expectation that those loans will have higher failure rates than conventional ones.

To emphasize his point that financing of projects deemed less than creditworthy is nothing new, Nelson showed the Board of Economists a Hammond Times front page from 1929 with a banner headline which read: "Shoestring financing a factor in $20 million market crash."

One reason for the recent run-up in stocks is due to the fact that real estate has become a less-attractive investment. Also, as hedge funds take more and more companies private, there is less stock to buy.

"There's still a lot of capital out there, but there are fewer places where it can find a home," Nelson said.