Which households thats you and me, borrowed lessed and pays down a lot of debt. Good for you. As it turns out not so great for the wider economy. Credit card balances are a lit eight more under control, home equity line as lot more so. Are the latest stats that show an increase in borrowing good news . Indicates americans are ready to spend again. Or does that borrowing demonstrate persisting weakness, debt as a resort when raises and over time arent in presentful supply . Lets start this inside story with a look at the numbers. Americans borrowed more than 11. 5 trillions the highest amount since the end of 2007. Just. The u. S. Economy plunged into crisis. According to the latest report from the Federal Reserve bank of new york, more americans started taking on Household Debt again, buying homes, cars and educations after years of recession. Compared to the same quarter in 2012, almost each credit line saw an increase in borrowing. For mortgage debt, the total amount borrowed in two thousand one hundred thirtyFourth Quarter was 8. 05 trillion. Compared to 2012, it was up 16 billion. In Student Loans the total amount borrowed in two thousand one hundred thirtyFourth Quarter was 1. 08 trillion. Thats up 114 billion compared to 2012. Debt in auto loans 863 billion of debt was recorded in the last quarter of 2013. Thats 80 billion more than 2012s last quarter. For credit cards Fourth Quarter stood compared to 2012, its 4 billion more. And in home equity credit, a particular villain in the run up to the recession, the total Fourth Quarter number was 529 billion compared to 2012, it was down 34 billion. There weeks number reflects the confident survey taken in january. The survey says confidence is now up over Three Mountains a sign the economy may Gain Momentum soon. The announcements are lucked news to the u. S. Federal reserve, the fed is kept short term Interest Rates purposely low, close to zero, since december 2008. It is a strategy called quantitative easing a Bond Buying Program pumping tens of millions of dollar as month, as stimulus, as other positive signs come like increased borrowing and confidence, u. S. Federal reserve chairwoman janet yell len says the fed would likely taper. The purpose of quantitative easing we have been buying longer term treasurery securities and Agency Mortgage backed securities, the objective has been to push down longer term Interest Rates. And i believe with succeeded in doing that. The purpose, is to disperse spending and to achieve more rapid growth. The newly announced debt comes with bag gauge, though, during each month, of 2013s Fourth Quarter, the average savings rate decreased. Also some debt like Student Loans could hamper economic recovery. Strap young people with huge debt early on, lowers their chances of buying homes. The Federal Reserves economists say those borrowing for mortgages in 2013, were people with great lines of credit, averaging Credit Scores above 720, the same trend also goes for credit card debt, solid scores meant more borrowing. This is flip flopped from trends in 20006, when people with bad credit were the ones more likely to borrow. So what does this all mean . And does the economy look difference to people in different regions of the country. Torret and ethnic minorities. Joining to discuss this, economists and author, he serves on the board of the economic institute. Exhibit contributor, mr. Jones worked on International Trade policy in the Clinton White house, and Chris Christopher director of global and u. S. Consumer markets for i. H. S. Global insight, a Global Information company, and Chris Christopher when we look at housing spending up, spending on tuitions and cars up, and home equity Credit Borrowing down, isnt that a good picture . There are good signs we have to remember in all of this, that the household medium income and is still about 7 where it was. So what we saw in 2013, was relatively okay Consumer Spending numbers but real dismostble income. 0. 6, to 0. 7 . So dr. Mall slow, what do we make out of the numbers. The number that concerns me most former College President , and i saw how many folks simply could not afford tuition. The change in the loan, put a lot of people, especially people in color, at the prierry. You look at what is going on, but the average income is about 31,000. And thats gone down a bit while the right number 51,000 has gone up. By a tiny tiny so the race gap in income has grown. But that means the africanamerican young people whose parent cant afford to pay their whole tuition, runs about 20 22,000. Medium income of 21,000, how do you pay. So you are putting more young people of color giving them less access. The tiny tiny ticked down, but we never look at number one employment population ratio. Is actually working and thats been leveled for white men going down for africanamerican men. So when you look at the impact, what you find out is that Unemployment Rate is a partial measure. A lot of people who are at the prierry, then you look at who got income gains. The top 1 to 5 , saw their incomes go un. The bottom 95 , 99 about the bottom 95 , saw level, and the bottom literally saw some erosion couldnt you argue the tuition either way, that yes, it is more debt, and thats not a good thing, but it also means the people have enough faith in their future. Even though we know they are a gap and raised by Credit Scores you have a solution. Get your credit score up, and your parents get the loan. Now, it is based on the number of timeous uh have had a late payment, as opposed to the credit score, so the number of lates is a short run number, the credit score is a long number, so that again, Clark Atlanta university lost 500 students. The entirety of the hpc, population lost 15,000 students. Look for the smaller colleges that are tuition driven, not only do young people lose opportunity, many of these colleges have found themes in economic trouble. So yes if you have the dollars, the tuition is a great investment, i had students drop out of school after the second year. We have a huge row of classes in front of us, symptom of them are a little bit full, some are almost empty, how do you look across all the different metrics and come up with an idea of how we are doing . I think thats exactly what you have to do . You have to look across the data thats available to get a picture of what with is going on. One thing that happen as lot in economic supporting is not on your program, is that we latch on to one specific number, and at the break out the pom poms or break out the shot glasses to get through it, and i think that the what is interesting is that from my perspective if you pit it all together, what you see is an economy that is still very broken, very weak, and moving side ways. Thats the one you started with on the increased and consuming borrowing. One of the most important things is that most of that borrowing as was detailed is from those that already have strong Balance Sheets. Which is one of the things that makes it so weak. Which is the fact that 90 of the gains and Economic Growth since 2000. 3 trillion added to the Economic Growth in the country have gone to the top 1 , and thats what with is fueling any large increases in Consumer Spending thats where housing prices are rebounding and thats where we have seen the economy be able to grow. Wage is at a 40 year low, the Median Income has not recovered housing prices the problem is we have had over 4 million lose take homes so the Balance Sheets are destroyed. One of the ways in which the Housing Market has recovered is the fact that wall street has created billions of dollars is are now turning around and representing them to people. One of the ink thises that is increasing the surge. And so across the board, when you look at below the top line, below the headline, its not the economy its doing well. And thats because a lot of these were for a very different time. They were for a time when we could generally see and take averages in the American Economy, and we had an economy that works for everyone, and be able to look at the unemployment number, or look at the Consumer Debt number. And say okay, this is generally what is happening, but the problem is that the economy has so unhinged. We have such a separation, from people from the at the very very top, from everyone else, that we have to look sort of that paragraph two and three. Hopeful in my estimation and it is one of the reasons why theres continued distress among families one of the reasons why people continue to believe that their children wont do as well and thats because of real world experiences where these sort of flash in the pan good line good top line headlines and economics are not actually translating to where most people live their lives and thats because we have so rewired in the economy in a way that will take dramatic action. What about that that big growth doesnt capture. So heavily gets distributed up the ladder. So difficult if you use to see what the the devil is in the details if you will. But when you look at what the chain stores are doing. You can notice that luxury is doing well, be but the middle tier is suffering, thats not really reflective in addition, only the top 5 of the income brackets. And if you add some of these sometimes anecdotal stories there are statistics that give you all of these details then it paints a wider and better picture. We are going to take a short break, when we come back, we will talk more about what a healthy recovering economy would look like in 20 with 14. And what some of the latest numbers tell us about how close we are to getting there. Blam more than at any time since the Great Recession began. More for cars Student Loans. On this edition, we are talking about Consumer Debt and what it says or doesnt say about the state of the economy. One of the great accomplishments of the American Economy over the last couple of generations was to lift seniors into maine, out of poverty. It just seems some disturbing signs. Well, janet yellen did a great job of economic expansion when congress refused to. Every time they refused towpath on a bam ma jobs bill, they were contracting the economy. You get the best of Interest Rate with a jumbo. You arent going to get 2 . For people in their late 50s. That means. When you are getting such a low return this is able to scar your ability to retire safely. You look at this generation, who is a sandwich generation, they are helping their kids, helping to support elderly parents so what is left for them. And in helping their kids with tuition, but also these boom rang kids that come back. You graduated with the average young person who graduated has about nearly 30,000 worth of debt. But since about 30 have no debt, these are the children of the wealthy, you are looking more at like 50,000. First year job can be very low. So you will stay home. And your parents will be helping you. So someone who is 55 and has an income, even of 100,000. Spending on their kids and on their parents so and this goes poorly. They are going to continue to contribute to the social security. We have an aging population, and on top of everything else, with the student loan debt, this very weak and anemic recovery, you can see that the younger generation. Are really suffering quite a bit. They are waiting long tore get married, when they do have children, they will be older, so this problem will exacerbate themselveses to a certain degree. So amara, to a certain extent, are we looking at the bottoming out of a cycle that isnt going to have a rebound, we got used the the idea that there are good times you go into bad times and is the new normal a not so good return. I think thats possible. Because we havent done the things necessary in the last six years to be able to retool the economy. So it the take off and grow. And then to get the economy working for everyone, and thats not happening. Because we havent taken advantage of the sort of moment that we were in. Chris christopher did people get better habits during this lassiterble time . I heard the savings rate went up, people stopped using their homes, those who werent under water as a source of ready cash. There were some good things going on in a macro sense, wasnt there . Yes. That has been a change in behavior. People are waiting longer. Things fit in a start kind of so people hold back they have not said on this program, people are not breaking out the champagne, they are just have extra money, they will splurge a little bit, but for the whole part everyone is very careful. During the last stretch of years, the latino population of the United States lost twothirds of its portfolio wealth. It is a shocking statistic. When we come back tafia short break, we will talk more about the losses sustained during the Great Recession, and how we build back and get back to a functioning economy again, this is inside story. Welcome back to inside story. Im ray swarez. The American Economy is still waiting to take off after years of steady if slow growth, following the Great Recession. As i mentioned. About twothirds of the wealth during the Great Recession. Exposure to the Housing Market which is cratering and allowed the metropolitan areas where latino families live, and also very heavy exposure to the building industry itself, where a lot of the workers were making the money, to buy those houses. Are these long tail losses that is one ones tht will take an awful long time to build back. They look like it. What is interesting is that both latino and black wealth, africanamerican wealth are the lowest on record. We have not had a time since we have been keeping records that black and latino wealth are as low as they are now, and thats as you exactly correctly say is a direct result of the housing crisis and air factors that expose those communities more to the hazards that are faced. And they are long term, and we can see that from Unemployment Rates so africanamerican Unemployment Rate is in the double digits. Latino rate is also very very high. Its almost 50 higher than what is the case for the general population that is recorded. If you look at what is happening in terms of black and latino youth unemployment, thats even more dire picture. So cheese are generational consequences. Generally if these things are going to turn around, they are a v shape. But we havent had that. So it is going to be a prolonged claw back for those communities. Unprecedented numbers with no net wealth at all. That means resources that cant be tapped to pay for College Education to build an addition on a house to start a small business, how do you come back from that. It is very difficult. But some people have come back, if you look at this by race, about 95 of whites over age 45 between 45 and 65 have seen their assets come back to where they were in 2008. Some 95 almost everyone, for asians it is almost even. It is like 98 . For africanamericans and for whatever reason they are bumped together, i love it when the censuses decides we are all the same, but for our group it is 55 . So part of sit the asset group. Fewer than a third of African Americans invest directly into the stock market. About 70 of whites have invested in the stock market. Another number thats worth looking at,ar mayry mentioned it, home ownership. More than half, almost 70 is it 70 , or 73 of the white population, owns their homes. Most people middle class people, the way that their wealth comes from is their home. Most of their wealth is their home. Latinos it is just a tick higher, neither over 50 , so. To finance two other things some folks dont have it. This number of black and brown people under water. Right inside you have people that are using false terms getting people to sign on the dotted line, they didnt know what they were signing for, about a third of African Americans and maybe 40 latinos could have gotten regular loans but they got sub prime loans because who was giving the loans to them . All of this has to do with the differences in wealth. Well, Chris Christopher we have most of 2014, still stretches out ahead of us. Do. At least it is friending in the right direction. Well, they are trending in the right direction, however, the unfortunate thing is the weather. If its the drought in california, or the colder weather, in the northeast, but sort of in snow storms that you get into the south, it sort of has put a damper on things right now what a lot of economists is trying to do is trying to whats the signal, whats the noise, and whats the weather effect. But it is our opinion here at ihs to say that after february, maybe march, maybe the beginning of the second quarter, things will pick up again. And we will get a nice little bounce, basically due to the weather. So i guess the best we can hope for is that spring comes soon, and it warms up. Thank you, great to see you all. That brings us to the end of this edition of inside story, thank you for being with us, the program may be over, but the conversation continues. We want to hear about the issues on this or any days show, you can log on to our facebook show, send us your thoughts on twitter, ournd hale is a. J. Inside story, am, or you can reach me directly at ray swarez news, we will see you for the next edition of inside story, in washington im ray swarez. Its taken us a day to trek to the small village of mulatos. We are up here in the mountains, and this is where colombias war has continued, where the government has pushed the paramilitary, and theyre at war. We have come to meet a group of activists