“It is common for people to see a bright flash of light and think that they are injured when they really are not. The ophthalmologist has to be somewhat leery of what caused the injury. Was it caused by a laser? Or are you observing a visual anomaly that has been there all along? I recommend referring these patients to an ophthalmologist who has experience with this type of injury.” -- Laser injury expert Bruce Stuck, director of the U.S. Army Medical Research Detachment of the Walter Reed Army Institute of Research at Brooks Air Force Base.
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The most common problem associated with laser pointers and the eye is a condition called flash blindness.  Flash blindness occurs when the eye becomes dazzled after being exposed to a bright light.  Most people have experienced flash blindness after having their picture taken by a camera with a flash.  This condition is temporary and most people regain their vision after a minute or so.  Flash blindness can be dangerous if it occurs while someone is performing a visually demanding task such as driving a car.  There have been several reported incidents of airline pilots becoming flash blind after someone on the ground aimed a laser pointer at the cockpit.  In 2010 alone, the Federal Aviation Administration said they had recorded 2,836 such instances.

Permanent damage to the eye can result from retinal damage.  The retina is a tissue that lines the back of the eye and is responsible for capturing the image we see and sending it to the brain resulting in the perception of vision.  If the retina is damaged, then permanent vision loss can result.  So a laser can cause permanent vision loss if it damages the retina.