2009 April 26 Sunday
Russia Misallocates Resources Toward Military Spending

Never mind that Russia is sinking into a deep recession. Time to crank up military spending.

Russia's leaders are getting used to cutting budgets this year. As the country sinks deeper into recession unemployment, according to some estimates, is as high as 12% and the economy is predicted to shrink by about 4.5% in 2009 the government is slashing spending at most of its ministries. The Energy Ministry's budget is down by 33%, and that of the Transport Ministry by 30%. But there is one hugely expensive project on which President Dmitri Medvedev has vowed to actually increase spending: transforming Russia's creaking Soviet-era defense industry into a modern technological power, and turning the 1.1-million-man Russian army into a leaner but more effective fighting force.

The US maintains by far the largest military in the world. In 2008 the US spent $711 billion or 48% of world military expenditures. Russia spent only 5% of world military expenditures or only a little more than a tenth of US spending. In both cases this was mostly waste.

One of the reasons why the US supposedly needs to maintain high levels of military spending is to keep Middle Eastern oil flowing. Well stop and think about that. Imagine we invested some of that money in reducing the amount of oil we needed to buy. There are many ways to do that. The US government could, for example, offer big tax rebates on purchases of hybrids and other fuel efficient vehicles. The US government could also offer a trillion dollars in loan guarantees for nuclear power plant construction. Those loan guarantees would lower the cost of capital enough for nukes that they'd become much more competitive with dirtier coal plants.

The US government could also use regulations and tax rebates to shift a lot lot demand for short haul trucks and buses toward electric power and could do the same for long haul rail. Rail electrification could allow a shift from diesel to nuclear and wind powered rail. Less oil, less need for the Middle East.

Russia has much bigger problems and a much greater need for a shift of money from military spending to other types of spending. Russia's biggest problem is demographic: not enough babies. Russia could offer subsidies for smart people to have lots of babies. Anyone who tests above 120 IQ could get subsidies for baby making with each additional baby earning a larger subsidy than the previous one.

Russia also needs to spend on energy efficiency and nuclear power for when oil production enters its final phase of decline. America needs to do this too.

Share |      By Randall Parker at 2009 April 26 11:34 AM  Russia

scum bag billy said at April 26, 2009 1:24 PM:

"Russia Misallocates Resources Toward Military Spending"

dude, they've been doing that for over 100 years....

The Undiscovered Jew said at April 26, 2009 5:05 PM:

Russia Misallocates Resources Toward Military Spending

Well, given that they have a history of being invaded by very formidable military opponents - and only 6 decades ago were invaded by a genocidal foreign power - it may not be a bad investment.

Also, cash bonuses do not work well at raising birthrates. Sweden and France have raised their birth rates close to 2.1 replacement by subsidising childcare and maternity leave so women can both work while raising children.

The Sanity Inspector said at April 27, 2009 8:55 AM:

Russia could offer subsidies for smart people to have lots of babies.

Don't they have that already, or used to?

Anonymous said at April 27, 2009 10:24 AM:

Reasons for U.S. military spending:

1. Keep a large standing army in case of internal rebellion.
2. Keep Israel safe.
3. Keep the Scots-Irish people happy by employing them as troops.
4. Give defense contracts to "make jobs" in favored Congressional districts.
5. Overawe foreign countries (Japan) so they peg their currency to the dollar, thus allowing the U.S. to export inflation (treat other countries as slaves), and live high on the hog (2x higher standard of living than if U.S. had to pay its own way).

None of this is going to go away.

Atheist Jew in Paradise said at April 27, 2009 2:01 PM:

No, Undiscovered Jew. Sweden and France have raised birth rates by importing fecund Muslim women. If every Muslim woman you import has 5 or 6 children, your fertility rate goes up very quickly. There's an excellent reason why the name Mohommed is becoming so popular in the delivery wards and grammar schools of western Europe.

The Undiscovered Jew said at April 27, 2009 3:20 PM:

Sweden and France have raised birth rates by importing fecund Muslim women.

Not really in the case of France.

France does not have a very high level of immigration because of the "Pasqua Laws" which cut immigration in the 1980's.

Most immigrants in France are 2nd and 3rd generation and they do not have high levels of fertility (ALgeria has a birthrate below replacement at 1.8, btw).

See below for distribution of French fertility rates:

The French Fertility Belt


While exploring the issue of French fertility online, I found a few maps of France showing each department's tfr for the years of 2003 and 2004 which might be of some interest to readers. They aren't official, but from what I know about French fertility rates, I believe they're accurate. For example, the maps show Mayenne as having an above replacement fertility rate for both years, and the French government confirms that Mayenne is the most fecund department in France.

The maps support the idea that while French immigrants have higher rates of fertility than the native French, native French women are unusually fertile for Europeans. In 2004, the departments of Val d'Oise, Essone and Seine-Saint Denis, all of which have very high concentrations of immigrants and first-generation North Africans, had fertility rates above replacement. But so did the departments of Mayenne (as mentioned), Vendee and Tarn-et Garonne, which are not known for being immigrant magnets, at least not to my knowledge.

Additionally, a total of 42 departments in Metropolitan France had tfrs of 1.9 or higher in 2004. These provinces seem to form a fertility belt running from the eastern Mediterranean coast north to Lorraine then west in a broad swath all the way to Bretagne. Fourteen departments had tfrs below 1.7, mostly concentrated in the southwestern area of the country. Only one had a tfr below 1.5.

In other words, given the wide geographic area enjoying high fertility in France, it seems reasonable to conclude that native French women are largely responsible.

averros said at April 29, 2009 10:32 PM:

>> "Russia Misallocates Resources Toward Military Spending"

> dude, they've been doing that for over 100 years....

Not as much as US still does.

Anyway, it's broken windows all over again.

>> Russia could offer subsidies for smart people to have lots of babies.

> Don't they have that already, or used to?

They don't, and they never did. None of the big-government regimes ever does that - because smart population is the very last thing they need. Smart people tend to challenge their "superiors", heh.

mike said at April 30, 2009 8:00 PM:

The number one reason why East Europeans aren't having enough babies is lack of housing - a legacy of the communist era. If Russia wants more babies then it should subsidise affordable housing. Giving cash bonuses doesn't make housing cheaper, in fact it actually makes it dearer.

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