Just watched this video
https://youtu.be/_qxyKDmJ7MM
Starts at about 6 min in.
Guy talks about Putin increasing taxes to finance the war. Russians are paying 13% taxes. Defence spending has surpassed 8% GDP which is sucking up nearly 1/3 of the state budget.
How will this affect economy? Will this create inflation? Any thoughts?
Not necessarily inflation if people are so poor that they aren’t spending money.
Over the long run, spending that much on defense will hurt Russian investment in infrastructure, education, or other things that are ultimately important to an economy. Over the short run, their economy is a mix, some statistics (very high interest rates, weak currency, moderately high inflation) look bad, while others (low unemployment, strong GDP growth) look fine.
Low unemployment, spit my coffee. A shortage of men to fight the war. Able bodied men off fighting or leaving the country.
Low unemployment, spit my coffee. A shortage of men to fight the war. Able bodied men off fighting or leaving the country.
You beat me to it. Low unemployment doesn’t mean much when men are fleeing the country in droves. There’s also a brain drain with the best and brightest men and women getting out. That doesn’t bode well for their military, since modern warfare is so reliant on tech.
Low unemployment, spit my coffee. A shortage of men to fight the war. Able bodied men off fighting or leaving the country.
You beat me to it. Low unemployment doesn’t mean much when men are fleeing the country in droves. There’s also a brain drain with the best and brightest men and women getting out. That doesn’t bode well for their military, since modern warfare is so reliant on tech.
Sure, they’ve got all sorts of demographic problems. And, those will likely contribute to economic problems down the road. But, at the moment, if you want a job in Russia, you can get one.
There’s also a brain drain with the best and brightest men and women getting out. That doesn’t bode well for their military, since modern warfare is so reliant on tech.
I’m still a bit fuzzy on why Russia is charging a bunch of its “hypersonic” (in quotes, because actual hypersonic-ness is a bit fuzzy on their stuff) scientists with treason. Need to read more deeply on it.
Because if it’s not legit treason, that sends a bad message to all your other scientists. They’re more likely to either leave the field or just keep their heads down rather than take risks in their work.
There’s also a brain drain with the best and brightest men and women getting out. That doesn’t bode well for their military, since modern warfare is so reliant on tech.
I’m still a bit fuzzy on why Russia is charging a bunch of its “hypersonic” (in quotes, because actual hypersonic-ness is a bit fuzzy on their stuff) scientists with treason. Need to read more deeply on it.
Because if it’s not legit treason, that sends a bad message to all your other scientists. They’re more likely to either leave the field or just keep their heads down rather than take risks in their work.
Yeah I saw that too. You’re right, it’s fuzzy because we don’t know the specifics, but being reported that the charges aren’t legit and Putin is using them as pawns to somehow legitimize the missile program. Apparently some that are being charged are very old, and some are already dead, so maybe it is BS. Wouldn’t put it past him.
My understanding was that the tariffs and global ban on Russian “stuff” was going to cripple them so badly they would need to give up the way entirely. It was only a matter of time…
How is that going?
My understanding was that the tariffs and global ban on Russian “stuff” was going to cripple them so badly they would need to give up the way entirely. It was only a matter of time…
How is that going?
Russia in 2021 had a GDP of about 11k$ and a PPP GDP of about 30k$ (per capita) not an economist but I take that to mean that a russian couple might have a 2 bedroom apartment and one car vs the USA (PPP of 60k$) where you might be able to have a SFH and two cars. Generally your life was probably pretty/sort of “western” if you were young, mid level educated etc.
Real or verified Economic data is non existent but we know that international Tourism at 4-6% is now zero, Oil and Gas exports…previously at 30-50% of federal revenue is now very close to zero (some ukrainian help) Auto industry which employed over 500k and was 5% of GDP likely now mostly directed to military capacity.
Export arms sales used to be 15b$ per year, now zero. Military expenditure as a % of federal budget is now 30 percent…There are also problems with Bond offerings (nobody buying) and 13% central bank rate.
Additionally 500k wounded or dead, 1 million fled. 1.5-2 million out of the work force, life expectancy 68.
In 1990 russia had an urban population the same as China at about 100m today China’s is 600m and Russia’s still the same.
Not and economist, and didn’t really answer your question…basically my uneducated sampling = not good for the economy.
Maurice
Thanks Maurice for the interesting and informative reply to the snarky question. Nobody who knows how sanctions work was claiming that they would quickly cripple Russia and force them to withdraw from the invasion of Ukraine.
My understanding was that the tariffs and global ban on Russian “stuff” was going to cripple them so badly they would need to give up the way entirely. It was only a matter of time…
Where did you hear that?
Thanks Maurice for the interesting and informative reply to the snarky question. Nobody who knows how sanctions work was claiming that they would quickly cripple Russia and force them to withdraw from the invasion of Ukraine.
Yeah, we have a pretty good understanding of the practical effect of sanctions from Cuba, North Korea, Iran, etc. The intent is to make life more difficult. Not as a magic wand.
My understanding was that the tariffs and global ban on Russian “stuff” was going to cripple them so badly they would need to give up the way entirely. It was only a matter of time…
How is that going?
I was thinking this the other day while also recalling how Russia was supposed to roll over Ukraine in a day or two.
There’s also a brain drain with the best and brightest men and women getting out. That doesn’t bode well for their military, since modern warfare is so reliant on tech.
I’m still a bit fuzzy on why Russia is charging a bunch of its “hypersonic” (in quotes, because actual hypersonic-ness is a bit fuzzy on their stuff) scientists with treason. Need to read more deeply on it.
Because if it’s not legit treason, that sends a bad message to all your other scientists. They’re more likely to either leave the field or just keep their heads down rather than take risks in their work.
This seems to be true to form in Russia. A recurrent tactic of Stalin. When your plans are not going well you blame the “wreckers”. It might be engineers in Stalin’s case or uncooperative farmers. Electrification not going well and the economy not leaping forwards, blame the wreckers.
My understanding was that the tariffs and global ban on Russian “stuff” was going to cripple them so badly they would need to give up the way entirely. It was only a matter of time…
Where did you hear that?
You kidding? Virtually every country that placed sanctions on Russia said it would cripple them.
Thanks Maurice for the interesting and informative reply to the snarky question. Nobody who knows how sanctions work was claiming that they would quickly cripple Russia and force them to withdraw from the invasion of Ukraine.
I think that’s called a strawman argument 
Thanks Maurice for the interesting and informative reply to the snarky question. Nobody who knows how sanctions work was claiming that they would quickly cripple Russia and force them to withdraw from the invasion of Ukraine.
Yeah, we have a pretty good understanding of the practical effect of sanctions from Cuba, North Korea, Iran, etc. The intent is to make life more difficult. Not as a magic wand.
Even when it comes to technology, my understanding is the point is to drive the cost up because they have get material via sanction busting which is going to cost more and slow down processes (e.g. repairing the oil refineries).
US sanctions cripple Russian stock exchange amidst Ruble collapse (msn.com)
I thought this was a timely story related to this thread.
“Due to the introduction of restrictive measures by the United States against the Moscow Exchange Group, exchange trading and settlements of deliverable instruments in US dollars and euros are suspended,” stated the Bank of Russia after announcing the new sanctions package against the Russian Federation.