PROOF: Russia's Economy is Collapsing

Abstract aggregate statistical data pales in comparison when examining microfoundations and household decision-making processes. This video tries to objectively and critically poke a hole in the claim that all is well back in the USSR 2.0. In fact, a counterclaim that the Russian economy is declining seems more plausible.

[archersfriend]

A Russian walks into a bar. Bartender asks "what is it like to live in Russia"? Russian answers "I cannot complain".

[stephanschmidt]

Russian soldiers were amazed when they conquered Germany because of indoor plumbing. 80 years later, they still don't have plumbing. What a great economic model.

[vadimer]

I completely agree! Russia can’t manage the land they already have and don’t need anymore

[aziggy]

👍🏻 Your point is confirmed by the Russian soldiers stealing washing machines and toilet bowls in the early days of the invasion.of Ukraine.

[barryhamm]

The russian military economy is growing but at the expense of the civilian economy which is shrinking. A growing military economy does not put borsch and potatoes on the table.

[enoughrope]

There was a study done that compared satellite images of lighting to total reported GDP. What they found was that free market democracies tend to slightly under report GDP growth. Meanwhile Authoritarian dictatorships tend to either under report it if they are trying to get international aid, or they over report it if they are not eligible for international aid. Russia and China were both found to be VASTLY over reporting their economic growth. What's more Russia has always under reported the expenses of their military I.E. their national police forces akin to the US FBI or Canada's RCMP are equipped with fighter jets and tanks. Their conscripts are practically unpaid which sounds like "free" to many people who do not understand the opportunity cost and their inability to contribute to the economy for the time they are voluntold. That is taking hundreds of thousands of young men out of the economy for a year or more and marking it down in the ledgers as "cost: not applicable". To make yet another point over a million Russians reportedly fled the country as draft dodgers. These were mostly young men with technical or professional jobs who could afford to leave. This constitutes a brain drain for a country that was already suffering from a declining population. Finally add in independently verified and provable data that shows 250, 000 to 400, 000 casualties in the war many of whom will require state aid for life.

[fcon]

Its so frustrating to hear media personalities say Russias economy is growing. It's smoke and mirrors. It would be like me, the head of my house, losing my job, and having no more outside income. Then, taking all my life savings and spending it all on a lot of guns and ammo. To people around me it appears that I've got more money than ever, but I'm living on borrowed time! It's unsustainable.

[Burnman]

This video is far from being filled with "intuitive arguments".
There is a much easier way of proofing how bad the Russian economy is right now:
The size of the Russian economy is about the size of Italian one, yet Russia has 3x the amount people, 57x the amount space. They have oil, they have gas, they have coal, they have gold, they have diamonds, they have wood, sea, vast amounts of the best agricultural lands, tons of fresh water, rivers, connectivity to basically every ocean and direct links to most of the biggest economies on the planet.
Their country used to have a good education system and a good standing in the world.

They have literally (and I cannot emphasize LITERALLY enough) EVERYTHING it takes to be the richest and most independent country on this planet and the best place to live in worldwide by a huge margin.
...
...
...

But what they really are is a gas station that is run by a mixture of mafia and the former KGB offering middle class life to the people in St. Petersburg, Moscow and Rostov and basically 3rd world conditions to everyone else outside these cities, waging war against their neighboring countries, because they still didn't understand that they could easily bind friends to them by being nice and supportive rather than menacing and imperialistic.

It's the saddest and most disappointing story on earth, only second to how I feel about people living there, not understanding this and still supporting that regime they currently have which is enforcing exactly what is described above.

[arctic_haze]

In Russia an official credible source is an oxymoron.

[BneiAnusim]

In the second week of the war in Ukraine, Russia abandoned its soldiers with no food, no ammo, and no fuel. It is a myth they are a superpower! 😉 Two years later still can't reach Kyiv!

[nnsnumbersandnotesunlimite]

It doesn't matter that the russian economy is growing or not. All the money goes into objects that explode into ashes in Ukraine. Instead of investing, Putler is transforming rubles into rubbles. At the end of the war, whatever Russia wins will be waste. Moreover, it will be impossible in a short time to transform the war economy back to a standard economy and extreme poverty will be the norm again for at least 20 years.

[egorgomon]

As a Russian citizen who follows the economic situation in the country, I can briefly explain what happens with those GDP numbers. The stats are most likely pretty accurate, but the GDP in this case doesn't reflect the actual economic situation for most people. Before the war, Russia had a large financial reserve called the National Welfare Fund. This fund was created a long time ago to serve as a buffer during times of crisis. At the start of the war, it had more than $100 billion.

To sustain the war efforts, the Russian government drastically increased its spending on the war (this year, it accounts for around 40% of the yearly budget). To maintain such high war spending while keeping other sectors like education and social programs somewhat afloat, the Russian government has had to spend a significant portion of the National Welfare Fund reserves. At this point, the liquid part of the fund is already half gone.

Essentially, what has been happening over the last couple of years is a massive flow of government money into the military sector. This is reflected in the GDP figures, as the military sector (often referred to as 'other metal products' in economic reports) is the only sector experiencing growth. In contrast, private sectors are either stagnating or in decline.

It's important to note that the growth from the military industry is not equivalent to growth in other sectors. This is because once tanks, shells, and other military equipment are produced and used in the war in Ukraine, they are essentially lost, without generating the same 'multiplication' effect as goods and services produced in non-military sectors.

In summary, the GDP growth numbers in Russia have very little connection to the actual living standards of the population. They mainly reflect the enormous government spending in recent years on the war, which is not sustainable beyond 1-2 more years.

TLDR: Imagine your government had a pile of money and spent it on producing billions of tennis balls and burying them in the ground. It would show in the yearly GDP numbers, but it would not affect your economic situation whatsoever. That's what is happening in Russia at the moment.

[macswanton]

In Russia, you don't get plumbing~ plumbing gets you

[robertoalex]

The thing about the plumbing is more of a mentality issue rather than a financial problem. I live in Romania and a lot of people here don't have plumbing as well, some people don't see it as a big issue so it's not a priority for them, some people actually think it's disgusting to have the toilet in your house :)). But in general people that don't have it see it as a "meh" problem.

[george.carlin]

I worked in Moscow in 1997-1998
every Friday all my male coworkers were going to bars and get drunk. They were drinking to the point not remembering how they got home 3 am Saturday morning. Then sleeping for the rest of Saturday and hangover, headaches on Sunday. The first part of Monday everyone in office were retelling, crazy drunk stories and laughing how good it was. During two years I worked there, a couple of dudes got small kids but nothing changed, drunk on Friday night, wasted weekend and laughing about it on Monday. Very shallow life style.

[bayernvorn]

An old Wehrmacht soldier told me that Russians used stolen faucets from Poland to hit them in the wall at home with a hammer and thought water was coming out of it.
I thought it was a fairy tale until I worked in the USSR in the late 1970s and saw the conditions there. Shared toilet outside, shared laundry and cooking room, shared bathroom for 6 apartments. No running water in the apartment.
Apart from Moscow and St. Petersburg, little has apparently changed.

[philipjones]

Was watching the Enforcer earlier and he showed a short film clip of a major russian "city" called SARATOV (1.2m) ! This standard is what russia wants to inflict on all Europe given the chance ! They seem either unwilling or incapable of raising their own living standards so they seek to degrade or destroy the prosperity of others down to their low level....!

[ManInSombrero]

A Russian here and I think you are totally right. Russian economy had been stagnating before the war since 2012 or so. The idea that it can be growing during the war and under unprecedented sanction is bizarre. In the first year, when Putin's administration had reserves, it indeed looked like Russia's economy was fine. But now it's quite different. If they are about to raise taxes while people are already struggling economically, you know it's really bad. My only hope now is that the inevitable economical collapse will lead to an end of Putin's reign.

[jamesk]

Well, they are importing oil from Belarus. That is telling.

[Интересный-щу]

I’ve worked in Russia in civil engineering and I completely agree with you, professor! In Russia, just like it used to be in the Soviet Union, you can not rely on local information. I would suggest to see on line presentations of professor Sergei Guriev ❤