By Kevin D. Williamson
Tuesday, February 22, 2022
I am a debt worrywart, but I try to avoid the “every
issue is ultimately my issue” mode of analysis, the kind of thing that causes
Senator Rubio to insist that protecting Florida sugar barons is a matter of
national security.
But public debt is a matter of national
security. It is for the Russians, anyway.
Perhaps I am wildly off-base and Andrew Stuttaford or
somebody else could set me straight on this, but the Biden administration’s
targeting the sovereign debt of Russia — a country whose government routinely
runs small surpluses and has no urgent need to borrow money — doesn’t seem
likely to accomplish very much, especially if oil prices continue to rise.
Moscow has many vulnerabilities, but an inability to balance the books does not
seem to be one of them — upsides of being a vicious police state and all that.
As ING runs the numbers, 42 percent of the Russian
population is directly reliant on government spending, which accounts for 34
percent of Russian household income. Reducing Moscow’s income would put real
pressure on the Putin regime, but it seems to me that the way to do that is by
cutting off Moscow’s access to the oil markets, not cutting off its access to
the credit markets.
Do you know whose government would be crushed by losing
access to the debt markets? Ours. That isn’t going to happen, but
Washington is vulnerable to rising interest rates, something to bear in mind
when there is problematic inflation to be dealt with.
Perhaps I am making too much of this, but the relative
fiscal situations of the two countries — Russia’s debt-to-GDP ratio is about 25
percent, ours is about 133 percent — have real long-term consequences, and
maybe short-term consequences, too.
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