Recently Standard & Poor downgraded Russia’s debt to below investment grade, which increases the cost of servicing existing debt. Russia’s government, banks and companies owe $600bn externally, equating to 50% of GDP thanks to the plummeting rouble, although the economic result of the downgrade isn’t as important as its symbolic and political impact. Vladimir Putin has always enjoyed contrasting the “stability” of the 2000s to the “chaos” of the 1990s. Russia’s return to junk status is “a symbol of the economy’s full-speed retreat” to that decade. “The cornerstone of his domestic legitimacy has gone”. (Sergei Guriev, Financial Times)
According to the debt clocks available online, the Russian national debt as a percentage of Russian GDP is 11 percent. The American national debt as a percentage of US GDP is 105 percent, about ten times higher (US debt as a percent of GDP is said to be much higher than the official figure). Put another way, the Russian national debt is $235 billion, (per capita $1,645; the US national debt, $18 trillion, per capita $56,952. Thus, the size of the US national debt is 76.6 times larger than the Russian debt. Who has debt problems?
The credit agencies are, in effect, saying Russia wouldn’t honour its debts. But here’s the thing: in January 2013 the US owed Russia $162.9 billion. Since the Russian national debt is $235 billion, 69 percent of the Russian national debt is accounted for by US debt obligations to Russia. (Statistics from Dr. Paul Craig Roberts, globalresearch.com)
Putin is a corrupt gangster who has embezzeled millions, and has “elevated” graft and corruption to the level of statecraft. The other side of the coin is that the US credit agencies are no longer independent agencies on whom the public can rely. They acquitted
themseves outrageously in 2008, and should have been wound up. The United States purports to be a “city on a hill”, setting an example to others, but then itself uses corrupted methods to strong- arm its adversaries. Nothing new, but as an Epicurean I want to protest the hypocrisy. The media paints the current crisis in black and white, as usual, but we have to be more canny and perceptive.
Veteran Ambassador Jack Matlock, who negotiated with Russia after the fall of the Berlin wall, says that we promised not to expand NATO in the 1990’s and reneged on the promise. He says that Ukraine is of existential importance to Russia, that arming the Kiev is a serious mistake and that we treat a country with ICBMs with seriously bad manners ( which started with George W. Bush and his neocons). If Epicreanism implies trying to find ways of getting along with everyone on both the personal and national levels, then we have to oppose the warmongers who are shouting the loudest in Washington DC.