cross-posted from: https://mander.xyz/post/45051999
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“Inflation … starts to rise, especially when, as in Russia, government spending does not go toward anything productive that would help the economy grow. Money loses value, consumption becomes harder, real income growth stops, the stimulus runs out, inflation falls, and the economy begins to retreat. In Russia, this stage has lasted since late 2024. That means the economy has not grown in real terms for a year. Some sectors have begun to decline, and consumption is starting to stagnate.”
Fear of inflation and a reluctance to explain to society why it has been forced to make such large and seemingly pointless sacrifices have combined to push the regime toward an austerity policy for 2026 — raising taxes and cutting spending — including on the military, if official budget figures for next year are to be believed.
But this belt-tightening has come too late. The burden placed on the economy’s net donors — the people and enterprises forced to subsidize everyone else — has already become excessive. Under its weight, the productive sector has begun to contract, causing tax revenues levied on profits, turnover, value added, and existing assets to fall.
The Russian economy that enters 2026 is like a group of people standing on a slowly melting ice floe. The support structure is melting on its own, but the unfortunate polar explorers are also constantly breaking off ever-larger chunks and, out of spite, throwing them at equally desperate people on a neighboring floe. It is hard even to imagine the effort and sacrifices that will be required to return to normality once the leadership on the “Russia” ice floe inevitably changes.
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How long have we been hearing this? I’m all for it, but I’ve lost my patience
We’ve been hearing it for a long time, and we’ll most likely continue to hear it for a long time in the future. Most economists didn’t predict something like a sudden collapse in Russia soon after the full-scale invasion of Ukraine.
One of my favourite elaboration is an interview with Russian economist Natalia Zubarevich in 2023 who said back then about her country, ‘There Will Be no Collapses, but Rather a Viscous, Slow Sinking into Backwardness’.
And in a chapter in the 2023 book on “Russia’s Imperial Endeavor and Its Geopolitical Consequences” (highly recommended read), Hungarian scholar Dóra Győrffy concludes (opens pdf):
Although Western sanctions imposed on Russia did not immediately cripple the Russian economy, this does not mean they are ineffective. Russia has lost its most pros-perous markets in the EU for its energy products, while trade reorientation towards Asia faces major obstacles given the limitations of transport capacities such as gas pipelines or shipping. The outlook is even worse for its long-term growth prospects. The sanctions and the war have undermined all major factors of growth including access to capital and technology, the available quantity and quality of labor, the institutional system, and freedom. The war has made Russia a neo-backward country.
The relative certainty of the long-term decline of Russia stands in contrast to the uncertainties surrounding the prospects of post-war Ukraine. While success is far from guaranteed, Ukraine has a window of opportunity to leave its post-Soviet patronal structures behind, and build a resilient democracy, rule of law, and a strong market economy with Western support. The return of refugees, the inflow of Western capital for reconstruction, access to technology, assistance in institution building, and a strong social commitment to the idea of freedom provide a strong foundation for a new Ukraine embedded in the transatlantic alliance. Achieving this vision is the shared hope and responsibility of Ukraine and the West in their fight against autocracies.
29 em-dashes… 🤔
Seems to be pretty well written, but it’s hard to say.
Very interesting, thanks for sharing!
Someone queue up “Swan Lake”
Good! I hope the fucking Muscovites run out of tricks and end up with another 1917. .
Any second now, the weak enemy, that is Russia, will falter, because they are so weak. But at the same time, they are so threatening, that we must triple our armed forces, because our enemy, that is Russia, is so strong.
Economically weak doesn’t mean militarily weak, you still need to defend against a military that sees it’s last option as throwing a few nukes at whomever seems least likely to swat them down.
I could see Putin falling back on nukes, I cannot see Russian commanders pushing the button. Same for Trump and the American general staff.
Yep, our bolstered conventional weapons will surely halt their nuking when the time comes. I am fine with both perspectives, I hate the double-speech within.
Interceptor missiles are and have been a thing since the early 60s. Defense spending doesn’t necessarily mean subs and tanks.
I think I read somewhere that the UK is developing a new lazer that can take down hypersonic ballistic missiles for approximately the cost of the electricity it consumes. Pretty sweet if true.
I don’t think Russia has an effective stock of hypersonics tbh. If we’ve learned anything it’s that Russian equipment stocks are mostly lies and lack of maintenance.
While true, I don’t think we should base our entire defense strategy on hoping that the russians are so incompetent that they can’t even deploy their most destructive munitions…
Well no I mean they almost certainly have a functioning nuclear stockpile, I mean they’re almost certainly lying about how many hypersonics they have.
Russian commanders ignored launch orders in the Cold War and I believe they would do so again.
Just because their economy is on the verge of collapse doesn’t mean they won’t keep sending millions of “undesirables” into the meat grinder.
They might be lacking in heavy equipment and expertise in maneuver warfare, but a million invaders still takes about a million rounds of ammo to pacify.
We can hope the russian economy collapses and the empire balkanizes, effectively making it impossible for them to keep up their war of attrition. The sooner it ends, the sooner we can stop producing munitions and the sooner people stop dying.
Americans spent about 1,000,000 rounds for every kill in Iraq. More like 1,000,000,000,000 rounds. :)
And the WMDs were a lie, but that doesn’t change the reality for Europe today, which is that russia is still a threat at least until their economy collapses and their federation dissolves.
