'Did you take Economics 101?' Panel reacts to admin's 'tone deaf' messaging on economy

0:00 Joining us, MSNOW contributo managing editor of the bulwar Sam Stein,

0:03 MSNOW political analyst and former undersecretary

0:06 of state for public diplomacy and public affairs,

0:09 Rick Stengel, and co-founder and director

0:11 of economic policy at VEDA Partners, Henrietta Trace.

0:15 Henrietta, let's talk about credit WHAT ARE CREDIT CARDS?

0:17 LET'S START WITH CREDIT CARDS.

0:18 LET'S START WITH CREDIT CARDS.

0:19 THE WAY TO THINK ABOUT THIS, I THINK THAT'S THE EASIEST

0:22 TO UNDERSTAND IS THAT THE average family spends $310 a week on groceries.

0:26 That's how much more it now costs you to fill up your truck or your car.

0:31 That's because of the war.

0:33 So now you're out a whole week's worth of groceries.

0:35 And that's why people are turning to credit cards.

0:37 Savings rates are at three-year lows.

0:40 People are the most negative and pessimistic about their job prospects,

0:45 their independent economic viability as they have been since World War II.

0:50 So people going to get credit cards is

0:52 an indicator of a very anxious nation that's run

0:55 through all of its savings and does not have

0:58 the money it's costing to get through this war.

1:00 And this is not a one-time event.

1:02 This is every single week, every time that you go to fill up,

1:06 every time you go to get groceries, and it will continue to cascade.

1:09 If you go to the doctor's office, your medical imaging costs more.

1:12 If you need to get a new phone, the semiconductors cost more.

1:15 All the fertilizer that are growing your food costs more.

1:18 Every single piece of this continues to compound.

1:20 And I think more problematic is the White House now

1:23 signaling that they want to pass a gas tax suspension,

1:25 which means they think prices are going to rise IT'S COMPOUNDING.

1:33 EXPLAIN HOW THE GAS TAX SUSPENSION WILL WORK.

1:35 SO WE HAVE AN 18 .4 CENT GAS TAX, GAS, SO IF YOU'RE BUYING GAS AT $4 .55,

1:59 56 CENTS, THIS WILL SAVE YOU 18 CENTS ON EVERY GALLON.

2:03 THAT'S FOR 90 DAYS.

2:05 SO FIRST, RIGHT OFF THE BAT,

2:06 I KNOW THAT THAT MEANS THAT And I think the straight

2:08 and gas prices are going to be high for another 90 days.

2:11 And the idea is that this is a one-time thing,

2:13 but it's going to raid all of the highway trust fund,

2:16 all the potholes and bridges and road repairs that we see.

2:19 It's a huge compounding problem.

2:21 It's very expensive, about $176 billion, if I'm not mistaken.

2:25 And those are the figures that we're going to be dealing with.

2:28 So the president is just lending some support to this idea now.

2:31 But there's a very long way to go.

2:33 And again, it's 18 that is really, really firing on all cylinders just like

2:50 the corporate sector you're seeing in the earnings reports.

2:52 And they're doing that because they have so much more money in their pockets.

2:55 In fact, I had the head of one of the big five banks in my office

2:58 yesterday going through the credit card data

3:00 and And just as Secretary Besant said, credit card spending is through the roof.

3:05 They're spending more on gasoline,

3:07 but they're spending more on everything else too.

3:10 Sam, it reminds me of the Scott Besant

3:12 line where he was talking about buying your 10th,

3:16 12th, 11th, 12th, 13th, 14th, 15th home.

3:20 What's up with this White House?

3:23 A little tone deaf to say the least.

3:25 I thought I would rank the best in one a little bit even more tone deaf.

3:28 You know, shaving off that 11th home as a way to, you know,

3:32 prepare for the costs going up is something

3:35 that only a select few of us can consider.

3:38 But Kevin Hassett, I mean, this is is he does this time and again.

3:41 He goes out there on TV, and he paints this incredibly rosy but also

3:46 incredibly detached picture of where the economy is.

3:49 And he does it because he knows that someone is watching him on TV,

3:52 and that person is Donald Trump.

3:54 And yes, credit card spending is going up,

3:56 but as we've just outlined, it's going up for the wrong reasons.

3:59 Gas is more expensive.

4:00 Cost of goods is more expensive.

4:02 People have to pay for essential services, and so they're putting it on credit.

4:06 That is not a sign of a healthy economy,

4:08 it's a sign of an economy that is coming apart at the seams.

4:10 And if in fact gas prices are not going to go down any time soon,

4:15 you can imagine that inflation is likely to get

4:17 even worse because it is compounding and goes

4:19 into all all these transportation costs that goes

4:21 into a cost for a number of other goods as well.

4:24 And so we are looking at a summer in which

4:26 people are naturally going to be going on the road.

4:28 People are going to be cooking out.

4:30 You can see right there, ground brief.

4:32 And, and the administration is looking for ways to chip at it.

4:37 So there's two things that are happening here.

4:39 One is they're painting an incredibly rosy

4:41 picture with these types of cable news hits,

4:43 and then secondarily is they're trying to find little ways to chip at the cost.

4:46 So gas tax holiday is one of them.

4:48 But the other thing that was kind of an interesting tell is

4:50 that Trump is considering getting rid of some of the tariffs on beef,

4:53 which is an emission.

4:55 We should note that the tariffs were in fact

4:57 responsible for raising prices in the first place.

5:00 So they're nipping around the edges and we'll see if it does any good.

5:03 I think in the aggregate, it's only going to be a little bit

5:05 of relief and the bigger picture problems will persist.

5:07 Rick, why just, why nip around the edges?

5:10 Why not just roll back all the tariffs.

5:13 Well, you know, the truth is every

5:15 president inherits his economy from his predecessor.

5:19 The economy that Trump inherited was an economy where inflation was going down,

5:24 GDP was I DON'T THINK IT'S GOING TO TAKE CREDIT

5:28 FOR THIS A FEW MONTHS IN, IT WOULD HAVE LOOKED GOOD.

5:31 WHAT DID HE DO?

5:32 SHOT HIMSELF IN THE FOOT WITH TARIFFS.

5:35 MAJOR KIND OF TERRIBLE MOVE IN INVADING IRAN HE HAS

5:41 SINGLE-HANDEDLY KIND OF DESTROYED A POSITIVE ECONOMY THAT HE INHERITED,

5:48 THAT HE COULD HAVE JUST ACTUALLY TAKEN CREDIT

5:50 FOR AND PEOPLE WOULD HAVE BEEN PRETTY HAPPY.

5:54 IT'S NOT A GOOD SITUATION.

5:56 I MEAN, THE OTHER THING WE DIDN'T MENTION IS

5:58 THAT THE NATIONAL DEBT NOW IS THAT THE NATIONAL

6:00 DEBT NOW IS AS HIGH AS IT'S BEEN EVER AS A PERCENTAGE OF GDP SINCE WORLD WAR II,

6:03 WHICH which is it's 100% of GDP over multiple trillion dollars.

6:08 So that also has an inflationary effect.

6:11 All of these things have inflationary effects.

6:13 And listening to, you know, that cabinet member,

6:15 it's like, did you take economics Mix 101.

6:18 Credit card debt has an inflationary effect

6:21 on every other aspect of the economy.

6:23 Yeah, and the APR on credit cards is exorbitant.

6:26 So if you miss one payment, you're paying a lot more for your bag of oranges

6:30 than you would have been paying if you just were

6:32 able to use your your debit card or your ground

6:35 beef um sam i i thought republicans were the one

6:38 that was ones that wanted to get a handle

6:40 on the national debt well they do when there's a democratic

6:44 president And that's time and time again what we see

6:46 So I was around during the Tea Party wave 2010,

6:48 this was the rallying cry And then subsequently

6:51 They got into office And during the Trump

6:55 administration The debt went up They don't

6:57 cut back on spending, they do cut taxes.

7:01 Those in combination drive up the debt.

7:04 And look, I mean, there will be cuts here and there that they will propose.

7:08 And I will give, I guess, if you're monomaniacally focused on that.

7:12 You can say, well, they're cutting back

7:13 on food stamps and Medicaid and all the things.

7:16 But they did just embrace a $1 .5 trillion defense budget,

7:19 which is an exorbitant amount of money greater than I think it was

7:24 like something like the next eight countries

7:26 combined in terms of their defense budget.

7:28 So, you know, it's selective spending cuts, constant call for tax cuts.

7:33 And so the calls for deficit reduction and debt

7:36 reduction are pretty much basically when a Democrat is president.

7:40 Where does this money come from?

7:42 Well, and by the way, if you're letting go of taxes on gasoline, on beef,

7:49 you're getting less money from money,

7:52 it's going to be the highest deficit of any president ever.

7:58 It's deficit spending.

7:59 You're not getting the tax revenue.

8:01 You're spending more than you're taking in.

8:03 They're THEY ARE TAKING INTO THE GAS PRICES FOR A FOURTH,

8:05 FIFTH, SIX TIMES, HENRIETTA,