wrapmargin won't work although it's set

First, I'm fairly new to vi and Linux. My situation is that previously
I used wrapmargin just fine and now when I set it to wrapmargin=7, vim
won't create a new line. If I check the setting, it shows it's set but
it doesn't work. I previously created a .vimrc file and also had
a .exrc file in a directory but have removed them both to try to
eliminate the problem. No luck. The set textwidth command also does
not work. Other commands work. The set number command works fine.

Below are the settings for a session in which I set the wrapmargin but
it won't work.

Thanks for your help,
urbanite

aleph=224 foldclose= mousemodel=extend swapfile
noarabic foldcolumn=0 mousetime=500
swapsync=fsync
arabicshape foldenable number
switchbuf=
noallowrevins foldexpr=0 numberwidth=4
synmaxcol=3000
noaltkeymap foldignore=# omnifunc= syntax=
ambiwidth=single foldlevel=0 operatorfunc= tabline=
noautochdir foldlevelstart=-1 nopaste
tabpagemax=10
noautoindent foldmethod=manual pastetoggle=
tabstop=8
noautoread foldminlines=1 patchexpr=
tagbsearch
noautowrite foldnestmax=20 patchmode=
taglength=0
noautowriteall formatexpr= nopreserveindent
tagrelative
background=light formatoptions=tcq previewheight=12 tagstack
nobackup formatprg= nopreviewwindow
term=xterm
backupcopy=auto fsync printdevice= notermbidi
backupext=~ nogdefault printencoding=
termencoding=
backupskip=/tmp/* helpheight=20 printfont=courier noterse
nobinary helplang=en printmbcharset= textauto
nobomb nohidden printmbfont= notextmode
bufhidden= history=50 prompt
textwidth=0
buflisted nohkmap pumheight=0
thesaurus=
buftype= nohkmapp quoteescape=\ notildeop
cdpath=,, nohlsearch noreadonly timeout
cedit=^F noicon redrawtime=2000
timeoutlen=1000
charconvert= iconstring= remap notitle
nocindent noignorecase report=2
titlelen=85
cinoptions= iminsert=0 norevins
titlestring=
cmdheight=1 imsearch=0 norightleft nottimeout
cmdwinheight=7 includeexpr= ruler
ttimeoutlen=-1
columns=80 noincsearch rulerformat=
ttybuiltin
nocompatible indentexpr= scroll=21 ttyfast
completefunc= noinfercase noscrollbind
ttymouse=xterm2
noconfirm noinsertmode scrolljump=1
ttyscroll=999
nocopyindent isprint=@,161-255 scrolloff=0
ttytype=xterm
cpoptions=aABceFs joinspaces nosecure
undolevels=1000
cscopepathcomp=0 key= selectmode=
updatecount=200
cscopeprg=cscope keymap= shell=/bin/bash
updatetime=4000
cscopequickfix= keymodel= shellcmdflag=-c
verbose=0
nocscopetag keywordprg=man -s shellquote=
verbosefile=
cscopetagorder=0 langmap= shelltemp
virtualedit=
nocscopeverbose langmenu= shellxquote=
novisualbell
nocursorcolumn laststatus=1 noshiftround warn
nocursorline nolazyredraw shiftwidth=8
noweirdinvert
debug= nolinebreak noshortname
whichwrap=b,s
nodelcombine lines=43 showbreak=
wildchar=<Tab>
dictionary= nolisp noshowcmd
wildcharm=0
nodiff nolist noshowfulltag
wildignore=
diffexpr= listchars=eol:$ noshowmatch nowildmenu
diffopt=filler loadplugins showmode
wildmode=full
nodigraph magic showtabline=1
wildoptions=
display= makeef= sidescroll=0
window=42
eadirection=both makeprg=make sidescrolloff=0
winheight=1
noedcompatible matchtime=5 nosmartcase
nowinfixheight
encoding=utf-8 maxcombine=2 nosmartindent
nowinfixwidth
endofline maxfuncdepth=100 nosmarttab
winminheight=1
equalalways maxmapdepth=1000 softtabstop=0
winminwidth=1
equalprg= maxmem=2060590 nospell
winwidth=20
noerrorbells maxmemtot=2060590 spellfile= wrap
esckeys menuitems=25 spelllang=en
wrapmargin=7
eventignore= nomodeline spellsuggest=best wrapscan
noexpandtab modelines=5 nosplitbelow write
noexrc modifiable nosplitright nowriteany
fileformat=unix modified startofline
writebackup
filetype= more statusline=
writedelay=0
nofkmap mouse= suffixesadd=

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