Morning Wire - Credit Card Debt Skyrockets | June 14, 2022

Episode Date: June 14, 2022

Americans’ credit card debt spikes as inflation climbs, the Texas power grid holds up amid record energy usage, and the power struggle within the Democratic Party escalates. Get the facts first on Morning Wire.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

Americans are increasingly charging essential purchases to their credit cards as inflation takes a bigger bite out of their paychecks. What is the Fed planning to do to curb inflation and is a recession avoidable? I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's Tuesday, June 14th, and this is Morning Wire. A June heat wave in Texas is putting record strain on the electric grid, causing experts to warn that outages could be imminent. And the power struggle within the Democratic Party has escalated. in recent weeks, with the progressive and moderate wings vying for control ahead of the midterms. We look at how the feud is playing out in the primaries. Thanks for waking up with Morning Wire.

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You can easily build it yourself, and its minimalist design featuring Japanese joinery really elevates any space it goes into. You've got to go to Thuma.co.co. Today to receive an exclusive $25 credit towards your purchase of the bed, plus free shipping in the continental U.S. That's t huma.c.o slash wire for a $25 credit, Thuma.coma.com slash wire. As economists continue to warn of a looming recession amid skyrocketing inflation rates, new data shows a record increase in U.S. household debt, as more Americans use their credit cards to pay for essential expenses. Here with the latest numbers and how shifting credit card rates will impact your wallet is Daily Wire Senior Editor Cabot Phillips.

So Cabot, we've talked about inflation quite a bit on the show, but now we're starting to see some of those more tangible impacts being felt. Tell us about the debt figures. We've known for a while now that Americans were struggling under the weight of price increases on essential products, but this latest data from the Federal Reserve is really shocking. Last month, total consumer debt that includes debt from credit cards, student loans, and auto loans, went up $38 billion just in one month. In total, Americans now have $4.57 trillion in consumer debt that is now an all-time record. And it's worth noting how quickly that debt is rising also. That $38 billion increase was a 10.1% increase compared to March.

So things are really escalating quickly. And if you add in mortgage debt to the equation, American household debt sits at 15,000. $18.8 trillion. That's also an all-time high. So bottom line, Americans have never been in more debt than they are right now. And is there a reason to believe that this is going to slow down anytime soon? Well, that's the thing. Many Americans are going into debt just to pay for essential household goods, and those goods don't appear to be getting any cheaper anytime soon, meaning there will likely be even more people using credit cards to pay for stuff that they have to have. Economists say it's an ominous sign that even though interest rates are going up, consumers are saying.

still opening new lines of credit at an incredibly high pace. According to the Fed, Americans opened 229 million new credit card accounts last quarter alone. That's higher than pre-pendemic levels. And the other bad news here is that because the Fed is raising interest rates and an attempt to slow down inflation, carrying a balance on your card month to month is going to start costing even more. For example, the average annual rate or APR on most credit cards is around 16% right now, but it's expected to be 19 or at least 18% by the end of this year. And that would be the highest rate in history. So it's all starting to snowball at the worst possible time.

And as a result, Americans are also saving less money each month. In April, for example, the U.S. savings rate fell to just 4.4%. That is the lowest mark that we've seen since 2008. And how is President Biden responding to this? What's the White House message? Yeah, they've maintained two main messages over the last few months. First, that inflation and high gas prices aren't actually President Biden's fault, but should instead be blamed on the war in Ukraine and more specifically Putin.

We've all heard Biden use that term Putin price hike. And the second main message has been that the economy is actually strong right now and that Americans should be confident despite price increases and market turmoil. For example, here he is this week touting the strength of the economy. The job market is the strongest has been since World War II, notwithstanding inflation. Millions of Americans are moving up to better jobs and better pay. And since I took office, families are carrying less debt on average in America.

They have more savings than they've had. Now, critics were quick to point out that the jobs he claims to have created there, many of them were simply jobs that came back after COVID lockdowns ended and weren't necessarily created as much as they were just brought back. And also those comments on debt and savings were criticized pretty heavily by economists who said that they were misleading at best or just outright false at worst. Now, are there any positives with the economy right now? I appreciate the optimism. Let's find some. Look, it's a struggle right now to find things to be

positive about when it comes to the economy. But if you had to pick something, it would probably be in the real estate market. Things are still quite hot there due to supply being so low after COVID lockdowns. And Americans are still making money on their homes, at least the people who own homes. According to data from the Fed, for example, Americans gained $1.6 trillion in home equity last quarter, which helped offset some of the money that most people have lost due to inflation and the stock market decline. But as home prices and mortgage rates continue to go up, fewer Americans are actually able to afford homes. A lot of people have been priced out in the last few months. So this good news won't apply to every American, just those that have a home already or are able to

afford a new one. Right. It's a hard time for renters and young people. Definitely. Cabot, thanks for reporting. Anytime. That's Daily Wire Senior Editor, Cabot Phillips. Coming up, energy usage in Texas hits record rates, as experts warn of potential blackouts. You can get this show and all of the content you love, wherever you are, all on the Daily Wire app.

Even if you're not a Daily Wire member, you'll be the first to know what's trending with mobile notifications for the latest news, and you'll get content from all of your favorite Daily Wire shows. Download the Daily Wire app and keep up with the facts no matter where your day takes you. As a massive heat wave swept the nation over the weekend, energy output in Texas reached record highs, straining the already vulnerable energy grid.

Here to tell us more about the record heat wave and how it's impacting the energy grid in Texas is Daily Wire's Charlotte-Pence Bond. So Charlotte, what are we seeing in Texas with this heat wave? Yeah, so the Texas energy grid has faced serious issues in the past. You'll remember 2021 when freezing temperatures left millions without power for days. Well, over the weekend, we saw record high electricity use. in the state of Texas, straining the grid even further. Thankfully, authorities are saying that the grid is functioning fine and that they have enough

resources to meet the high demand. But June is early to see this level of energy demand because historically, Texans see peak temperatures in August and September. So they're expecting more energy usage in the coming months. Why is Texas seeing such high energy use now so early in the summer? Well, the main reason is the massive heat wave, sweeping the mid and southwest, especially Texas. For example, out west on Saturday, there were 27 record daily high temperatures nationwide, either established or tide. That's according to Bob Oroveck at the U.S. Weather Prediction Center.

The northern Texas region has already had two days of triple digit temps, which is almost a month earlier than usual. And we should also point out that this amount of energy grid strain is not normal for a weekend. Typically, there's less demand for electricity on weekends because people aren't in offices. So again, another troubling sign that we could see even higher demand later in this summer. On Sunday, the National Weather Service put out a heat advisory for every county in Texas except for eight. And a lot of those were issued an excessive heat warning, meaning the heat index was anticipated to go up to 105 degrees or more for two hours or longer. Now, have there been any power outages so far in Texas? There were some areas that saw lengthy outages over the weekend,

but those are believed to mostly just be incidents associated with the high temperatures and not caused by the grid. On-court electric delivery, a utility company in Texas, said the record-setting heat is putting additional stress on our equipment. The main takeaway here is that to this point, the grid has actually held up and Urquot didn't have to ask Texans to conserve energy. That happened back in May when another heat wave hit at the same time that some plants went down. And this is being closely watched on because of the grid's issues in the past. specifically during that freeze that happened early last year and resulted in over 240 deaths. Right, that was really tragic.

Well, with historic high temperatures already hitting many parts of the country, let's hope these energy grids continue to hold up. Yeah, let's hope. Charlotte, thanks for coming on. That was Daily Wires, Charlotte Pence Bond. Democrat Congresswoman Alexandria Ocasio-Cortez endorsed last week, fellow progressive New York State Senator Alessandra Biagi in a primary campaign against Congressman Sean Patrick Maloney. It's the latest move in an ongoing war between the left wing

and more centrist factions of the Democratic Party. Here to discuss is Kerry Sheffield, senior policy analyst at Independent Women's Voice. So, Carrie, walk us through some of these races and the intra-party war between progressive and moderate Democrats. Thanks for having me, Georgia. Well, yes, this is a big move by Ocasio-Cortez, because Sean Maloney is a long-serving, powerful, incumbent leader among Democrats. He heads the Democratic Congressional Campaign Committee, which is the official political arm for House Democrats, and he's seen as more of a moderate Democrat. And on the other hand, Alessandra Vyaji is positioning herself as the progressive alternative to Maloney and said she was honored by AOC's endorsement. Now, in 2020, Biagi publicly said that she

wants to defund the police, something that more centrist Democrats have tried to distance themselves from, including President Biden, who in his state of the union this year, said that it's time. to quote, fund the police. As in some other intra-party Democrat fights, this New York race is also in some ways a generational battle. Biage is 36 years old and Maloney is 55 years old. It's the young firebrand against the seasoned veteran. Ocasio Cortez is hoping she can recreate her own success from a 2018 victory over a long-time

incumbent former Congressman Joe Crawley. Crowley was a powerful 10-term incumbent, and at the time, Crowley was chair of the House Democratic caucus. When Ocasio-Cortez took office at age 29, she was the youngest woman to serve in the U.S. Congress. Now, what other races are we seeing where we have a progressive running against a moderate? Another big one is a Democratic primary in Texas. Progressive candidate, Jessica Cisneros, targeted incumbent Henry Coyard, who was the only pro-life Democrat in the entire U.S. House. Cisneros requested a recount in her race against Cuellar, who was ahead on election night by 177 votes and declared

victory. But Cisneros refused to concede, and now that the official canvas of the votes is completed, Coyars up by 281 votes. Here's some sound from a video released online by Cisneros who is urging her voters to monitor their ballots. We're not backing down from this fight because every single vote should count. We clearly have a shot to take down the last anti-choice Democrat in Congress. So we need your help. This is our call to action to make sure that we win this election. So if your mail-in ballot was postmarked by election day, which means May 24th, track it using the link below to make sure that your boat gets counted. If your mail-in ballot was rejected, caller voter protection hotline. Now, generally speaking, who would you say is winning this power

struggle within the Democratic Party, the progressives or the moderates? That's a tough call. But right now, I'd say it's pretty fairly split. In an Ohio U.S. House raised, Biden endorsed centrist, Chantel Brown, defeated more progressive Nina Turner, who had scored some big-name progressive endorsements. But in Pennsylvania, progressive John Federman easily defeated centrist Conor Lamb. Lamb had been profiled in the media as a model centrist for Democrats to win battleground states. Over in North Carolina, the more moderate Valerie Foucher defeated squad-backed Nita Alam. Alam heavily criticized Foucher for millions of dollars in spending for Foucher. The spending was by crypto billionaire Sam Bankman-Fried.

In Oregon, progressive Andrei Salinas defeated more moderate Carrick Flynn. Bankman-Freed spent millions of dollars in that race also, but he came up short. In a competitive House primary in Oregon, progressive challenger Jamie McLeod Skinner defeated incumbent and Biden endorsed Kurt Schrader. Okay, well, the Democratic Party is facing an uphill battle for the midterms. We'll see what kind of impact this internal battle has in November. Kerry, thanks for reporting. Thank you.

That was Carrie Sheffield, senior policy analyst at Independent Women's Voice. Other stories were tracking this week. A major stock market selloff occurred Monday morning as the Dow Jones Industrial Average went down over 2.5%. The S&P 500 fell over 3.5%, and the NASDAQ fell almost 4%. On Sunday, the CDC ended its rule-making international travelers get a negative COVID test before coming into the U.S. CDC director Rochelle Willinsky issued the order getting rid of the rule. saying it's not currently necessary. And the House Select Committee

holds its second hearing on the January 6th attack. On Monday, they focused on President Trump's claims of widespread voter fraud and brought in a former Fox News editor and a Republican election attorney. Two more of the seven total hearings are scheduled to be broadcast

Wednesday and Thursday of this week at 10 a.m. Eastern on all major news networks. Thanks for listening to Morning Wire. We created this show to bring more balance to the national conversation. If you love our show and you stand with our mission, please consider subscribing, leaving us a five-star rating,

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