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Budget mythology. Social spending of the police state

Бюджетная мифология. Социальные траты полицейского государства

What is bad, when the state a lot of money and people have little. This is a new edition of “Money for Freedom” with economic journalist Maxim Blunt.

A week after meeting Vladimir Putin, President, to put it mildly, Mr. members of the government and the head of the Central Bank for low growth of economy and incomes of the population, my two cents decided to insert and Prime Minister. At the meeting Putin not being invited, so Dmitry Medvedev held their own.


Gathered in Gorki near Moscow Ministers and Vice-premiers and gave them my priceless opinion on what should be the Federal budget next year, and at the same time and in the next two years. The main thing in the Russian budget, according to the head of the government, is the financing of the social sphere:


– From the social sphere depends how people live. We will talk about the funds that will be allocated to the demographics, health, education and science, youth policy and social security. The development expenditure of the social sector is the largest part of the budget. It is reasonable to say that this budget should be socially oriented. This priority will continue in the three-year plan.

In almost all areas of this sector, including those about which we are talking today, there are national projects. This means that we concentrate here is very considerable financial resources. Do this in order to produce a greater effect. In addition there are national projects of the state programs that directly affect the interests of the people. In sum, this is a package of measures, Prime Minister said.

Бюджетная мифология. Социальные траты полицейского государства

Dmitry Medvedev

Listen to Dmitry Anatolyevich, and tears of pride and emotion welling in his eyes. Cares about its citizens! National goals, national projects and state programs comes up. Resources for the realization of national dreams focused.

Heal in the next three-year plan the Russians happily ever after. But for the pure joy from the constant concern of the government and its Chapter on people’s lives mixed with a strange unpleasant feeling that you cheated. Indeed, modernization breakthrough first began in 2007.

About the social orientation of the budget and did repeat from the beginning. National projects also did not appear yesterday. A year and a half has passed since then, as the government set goals to achieve accelerated growth of the economy, the level and duration of life, and to defeat poverty. But according to Rosstat, the level of poverty in the second quarter of this year went up again.

Statistical office justifies this by the fact that in March, up 7 per cent increase in the value of the subsistence minimum, which led to growth in the number of people living below the poverty line. However, if you look at this sharply higher cost of living – 11 185 rubles per month per person, – in the excessive generosity to suspect the Russian government will not work. Real disposable income of Russians, too, fell for the sixth consecutive year, and it’s starting to bother even the head of state.

One could, of course, to assume that Russia, following the precepts of the Minister of economy Maxim Oreshkin, in recent years sacrificing the present for the future. And now stands on the verge of a fantastic growth that will magically reverse all the negative trends and send the country into a bright and carefree high-tech future.

However, there is a discrepancy. The Ministry of economic development regularly publishes official macroeconomic forecast, on which basis, including the basis of the budget. The official version of the new forecast will be submitted to the government together with the draft budget on September 19. But in late August, the Department for macroeconomic analysis and forecasting, and preparing such documents, has published a review of the status and prospects of the Russian economy. And the first thing that catches the eye is a revision of the expected economic growth next year.

In April the Ministry of economic development believed that the Russian GDP for the third year of another term of Putin will rise by 2 percent, and now gives not more than 1.7. Therefore, a breakthrough is not expected – solid stabilization. And then when you implement a calm, baseline scenario.


Since we are talking about the Federal budget, it makes sense to take a closer look at the income and expenses of the state. Despite the social orientation of the budget, its size and structure is not very compatible with economic growth and well-being of Russian citizens.

Take at least this year’s budget. Formally, the Russian Prime Minister did not lie. Social policy is indeed the largest section in the structure of expenditures of the Federal government. Allocations – almost 4.9 trillion rubles, i.e. slightly less than a quarter of the total budget. In 2019, however, the Finance Ministry has reduced this article on 80 billion compared to last year. But we have to enter the position: in 2018, was the presidential election, and to indulge the population every year, no one signed.

But much more interesting to see what are the remaining three-quarters of government spending. If you add up the costs of the officials, the army, law enforcement officers and numerous secret service, you get 6.6 trillion – more than a third of the budget. In contrast to the “social policies”, these sections not only not been curtailed but has received additional funding to 740 billion rubles.

And more than half of the entire gain – 378 billion – was not the army, as you would expect, and the article “law Enforcement and national security”. If we take the share of this section in the budget, the Russians must live in one of the most legal and safe countries in the world. Except that in North Korea, law and order are protected better, than in Russia. But to judge this is difficult, because North Korea is a “black box” information there comes scarce. And all for the sake of national security. Russia in this question is on whom to equal.

Бюджетная мифология. Социальные траты полицейского государства

Another section of the budget has been increased substantially this year. The national economy received an additional 375 billion. And here we are faced with an amazing paradox. Social policy is the largest section of the Russian budget, and the standard of living of the majority of the population falls. Government spending on the economy are rising and the economy is about to slide into recession.

And the Minister of economy, contrary to the official projections of his own Ministry, right this prevents. Maybe it would make sense to stop and try something different? Stop supporting the national economy, reducing levies with the real. Stop raising taxes, which placed additional burdens on every wallet in the country. You look, and the protection of their own people – that is, law enforcement will save money. Yes, and poverty will cease to look so dramatic.



© 2019, paradox. All rights reserved.

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