Comment by ddalex | Hacker News Reader

Comment by ddalex | Hacker News Reader

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People must stop using west-based numbers for these calculations, the economy is totally different in the east

* lost equipment costs basically 0 - they are mostly old hand-me-downs, the factories are not producing them anymore, so all the costs are already sunk; also the supply is plenty, so abandoning them is nothing; but let's be generous and say $100k / piece of equipment lost

* airplanes are more expensive, but again, this is old stock, there is plenty of them, and not incurring costs of producing more - let's say 10M per craft

* $1000 / day / soldier - this is absurd. They left the poor blokes in the cold with no fuel, military rations that expired in 1997 for food, and they rob the houses and stores they encounter for necessities; I'd say max $20 / day / soldier, and this is a country that average salary is $500 / month, so paying your soldiers $600/month is above average !

So in total this gets you 14M / day. Let's double that for the upkeep and then round up to 50M / day and you'll get a closer look at what the costs truly are like for Russia.

Basically the military in this invasion costs them spare change. The really costly bit is sanctions - in this context the lost at least 300B so far, with no end in sight. No wonder Putin is pissed.

> lost equipment costs basically 0 - they are mostly old hand-me-downs, the factories are not producing them anymore, so all the costs are already sunk;

Sure, for some legacy capital items, the production costs are sunk. But the cost of not having the equipment isn't. You can pay replacement cost or you can pay the permanent reduction in military capacity cost, but you are paying the cost either way if you lose the equipment.

Unless you are saying the operational value of the equipment is zero, in which case, sure, the loss is zero but then why did you even bring it to war in the first place?

> airplanes are more expensive, but again, this is old stock, there is plenty of them, and not incurring costs of producing more - let's say 10M per craft

If you aren't calculating it at the cost of replacing the capacity provided, you are underestimating the real cost.

Those don't matter too much if you win first, I suppose.

They do if you have other potential conflicts, of your choice or someone else’s, after winning.

Cash flow is a present issue while CAPEX is an issue for the future and can be spread along years. Most of what Russia sent to fight (except the jets and Pantsir AA systems) is stuff they intended to replace in the future and already planned for CAPEX. Thus, if you would apply accounting terms that stuff is already depreciated to 0 even if still has some operational value.

The big question that we want answered is will be Russian forces insolvent? And they can be both financially and operationally insolvent. In the former they don't have cash to pay soldiers and suppliers and thus will have to depreciate their currency even further. In the latter they just don't have enough production capability and stock to cover the war needs for fuel, ammo and rations. Giving the know corruption on the military and government I think the latter is possible at least for a few critical items like MLRS ammo and cruise missiles.

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