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this post was submitted on 17 Aug 2023
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Lower rouble means that Russian exports are cheaper and more attractive allowing government get more money domestically after conversion thus helping balance the budget. It also means that imports are higher of course, but seems that exports are what's relevant for state budget in Russia. Deficit in Russia is only around 2% of the GDP, compare that to the astronomical deficit US is running.
Also worth noting that rouble value against the dollar doesn't have much practical meaning given that there's very little direct trade between Russia and the west.
The American deficit is less than 5% of GDP, so it's larger relative to the economy but not exactly what I'd called astronomically higher.
5.3% already now while continuing to grow:
5.3% is very much still in line as a fairly ordinary deficit compared to many other countries in the world. A little towards the higher end, but not out of the ordinary by any means. The 2027 projection is a fair cause for concern, but the point of this report is explicitly to make sure the American budget doesn't head that way. To quote:
Thing is though is that US has been able to run a large deficit because the dollar is the reserve currency. Since, until recently, countries had no choice but to use SWIFT for global trade and energy was traded exclusively in dollars, that meant countries had to buy dollars in order to trade them for these resources. Dollar based economy is rapidly shrinking now because US in its infinite wisdom decided to cut one of the biggest commodity producers out of it. So, now we're seeing more and more bilateral trade happening where countries use their own currencies. This process is developing much more rapidly than anybody expected, and what that means is that the value of the dollar is shrinking.