Russia Losing?

No, it is not the US

The Mainstream media is full of reports that Russia intends to reduce its military spending next year and the year after.

June 27, 2025, President Vladimir Putin announced plans to reduce Russia’s military spending starting in 2026 during a press conference in Moscow.

This decision comes after a historic 25% rise in defense expenditure in 2025, which increased military spending to 6.3% of GDP, occurring alongside a marked deceleration in economic expansion and a 24% reduction in projected energy revenues.

Putin acknowledged that higher military spending contributed to persistent inflation projected above 8% in 2025, while Russian and Ukrainian negotiators remain in contact and Moscow prepared to return 3,000 Ukrainian soldier bodies.

On June 25, NATO members agreed to boost their combined defense budgets to 5% of GDP within the next ten years, a move that President Vladimir Putin condemned by saying the increased spending would mainly benefit U.S. defense contractors and emphasized that this was a matter for NATO to decide, not Russia.

The proposed reductions in Russia’s defense budget could alter its international military posture, influence employment within the defense sector, and indicate a broader fiscal adjustment in response to persistent inflation, sanctions, and economic challenges facing the country.

Notice the last sentence: "a broader fiscal adjustment in response to persistent inflation, sanctions, and economic challenges facing the country."

Also, notice the reference earlie in the excerpt to ”a marked deceleration in economic expansion and a 24% reduction in projected energy revenues”. While oil prices are lower, the effect on Russian GDP is rather minor and compensated for in other areas. And the article does not explain how these “projections” were made.

Sanctions? They have not hurt the Russian economy at all – in fact, they have stimulated it. They hurt those most who impose them.

However, the military budget for 2025 was increased —as a planned temporary measure — to modernize Russia’s military and the defense industry, with for example, to mass produce Oreshnik missiles and other weapons systems — as well as to create new industrial infrastructure to support more cost efficient military production. This includes technologies which are strictly speaking commercial industrial advances with military applications. Modernization is happening in all areas of Russian industry.

Nonetheless, the MSM is still committed to its old story — a kind of political catechism — that Russia and its economy are falling apart, if not now, soon…… Genuflect to Washington and repeat.

The truth is , however, is that the Russian forces are gearing up to take all of Russian-speaking Ukraine. Once the war moves west into steppe land west of the Dniepr, everything will accelerate. Already,the NeoNazi factions are competing for power, fighting over the rotten carcass of the Kiev regime.

As I said, the increased military budget for 2025 was always intended to be temporary, only one year. With the West heading for economic recession, if not collapse, Russia also anticipates a reduction in oil prices. Back to horse&buggy days?

By 2026, with Ukraine largely defeated and the war winding down, further increased expenditures on advanced military technology will not be necessary, Funds can be redirected to where they are needed elsewhere in the economy, something which Putin mentioned at the SPIEF, as he has in other speeches

Thus the overall budget may not decrease that much – just military spending.

Russia can control its military spending. The US cannot.

In the US military budgets just grow and grow to support a military industrial complex out of control. In addition, Russian military hardware is on average at least a third the cost of the same category of thing in the US arsenal — but often twice as effective.

Putin, speaking at the SPIEF.

Despite a challenging international landscape, Russia’s GDP has been demonstrating an annual growth rate of over four percent over the past two years, which is above the global average.

Regarding the structure of this growth, let me share a specific indicator with you – the so-called non-oil-and-gas GDP. It excludes sectors related to hydrocarbon production. In 2023, Russia’s non-oil-and-gas GDP increased by 7.2 percent, followed by an additional 4.9 percent, or almost five percent, in 2024. These are solid figures exceeding the overall GDP growth rates.

…defence manufacturing was not the only driver of our overall GDP growth, as some may believe. Of course, it did play a role in this regard, but we must keep a close eye on the way this growth has been structured.

Over the past two years, the top performing industries have included agricultural production, manufacturing in general, the construction industry, logistics, services, finance and the IT sector, covering almost all the key, essential segments of the national economy.

What does this mean? It means that thanks to the efforts of tens of thousands of enterprises and companies, their teams, managers, and their proactive approaches, as well as the work of millions of entrepreneurs, the Russian economy has been steadily developing, achieving new heights in terms of quality, complexity and diversity. The idea of the Russian economy being completely commodity-based and dependent on the exports of hydrocarbons is clearly outdated; it is becoming a thing of the past. We are living in a different reality now.

Russia is the world’s fourth largest and Europe’s number one economy in terms of GDP. I am not talking about the per capita GDP, but about the sheer size of the economy. Still, this is a major milestone.

And Ukraine:

I have stated on numerous occasions that, in my view, the Russian and Ukrainian peoples are essentially one people. In that sense, we see Ukraine as ours.

Also:

There is an old saying, not quite a proverb, but a long-standing principle: wherever the foot of a Russian soldier steps is Russian land.

At the same time, however, Russia respects the right of self determination, which Putin says was one of the reasons for supporting Donbass and Lugansk who had declared that right .

So, as I have said in other posts, Russia will most likely carry out oblast by oblast referenda to allow people to choose independence or some form of union with Russia without coercion.

The adjustments to military budgets indicate a military timeline for Ukraine — the next couple of years. They also indicate a long-term plan of economic and industrial development.

Can’t afford a parrot? Try adopting a crow.

I should mention that at the zoo, we had a baby seagull who loved to sit on my head in my hair. Very sweet. Trouble is that it wasn’t housetrained!

It’s June 30 here in Japan. One day until July.

So please help me meet end-of-month expenses by buying coffee! Chappy and Ichi will thank you too! Click HERE!