Superpower in a Cash Crunch: Russia Scraps Its Only Aircraft Carrier

Bye-bye, Admiral Kuznetsov. Not a tear will be shed.

Admiral Kuznetsov

Indian news media called Putin’s only aircraft carrier the “Ship of Shame.”

I didn’t care enough to ask why. Maybe because it’s been rusting in Murmansk since 2018. Maybe because it needs a tugboat just to leave port. Maybe because it caught fire during repairs and killed workers. Who knows. Maybe it earned the name.

But whether or not it was a ship of shame, it was certainly a ship of evil.

Russia’s Admiral Kuznetsov conducted its only combat mission from late 2016 to early 2017, during the Syrian Civil War. From its deck, Sukhoi fighter jets flew hundreds of sorties, striking everything from rebel positions to civilian infrastructure. Russian sources claimed over 1,000 targets hit. The world saw the result: Aleppo reduced to dust, hospitals cratered, and first responders targeted with so-called “double tap” strikes—bomb, wait, then bomb again.

And these are the people the West still sits down with to negotiate ceasefires.

So I was pleased when Andrei Kostin, chairman of Russia’s state shipbuilding corporation, finally admitted: “We believe there is no point in repairing it anymore. It is over 40 years old, and it is extremely expensive... I think the issue will be resolved in such a way that it will either be sold or disposed of.”

Good. Dispose it.

Some argue that aircraft carriers are relics in the age of drones and hypersonic missiles. It’s a tempting idea—clean, efficient war fought by remote control. But it’s also wrong. Without carrier strike groups, you lose the ability to hit a threat where it emerges—before it metastasizes into something that reaches your cities. Admiral Kuznetsov was used to devastate Syria, destabilize the Middle East, and flood Europe with refugees.

But carriers can also be used to contain, to deter, to protect.

When the Iran–Israel war broke out in June 2025, the United States didn’t posture. It deployed three aircraft carriers:

• USS Carl Vinson – operating in the Arabian Sea

• USS Nimitz – diverted from the Indo‑Pacific

• USS Gerald R. Ford – the newest supercarrier, sent from Norfolk to the Mediterranean

It wasn’t just for show. It was a message: hundreds of jets, fully armed, ready to strike the moment we choose. That’s what deterrence looks like. That’s how you contain a regime like Iran.

Europe, of course, needs carriers—and there is no way to sustain their current posture for long. But the better news? Putin’s Russia now has none either—and likely never will again.

And back in Russia, where even basic economic firepower is beginning to fail, the cracks are no longer subtle. Demand is collapsing. Industry is faltering. And the steel sector—once the backbone of Russian heavy power—is now in financial freefall.

Magnitogorsk Iron and Steel Works (MMK), one of Europe’s largest producers and Russia’s second-largest by output, reported a staggering ninefold collapse in profits to just 5.6 billion rubles ($70.6 million).

And MMK wasn't alone. Severstal PJSC, officially Russia’s largest steelmaker, posted negative cash flow for the first half of the year. Revenues fell 16%, and net profits were slashed in half to 15.5 billion rubles ($195 million).

When steel companies report negative cash flow, it’s not a minor wobble—it signals deep structural stress. Demand from core sectors—construction, automotive, infrastructure—has collapsed. Revenues are drying up while costs remain stubborn.

Meanwhile, the Russian Central Bank claims it has inflation "under control"—so much so that on Friday it cut interest rates by 200 basis points, dropping from 20% to 18%. This is absurd.

Let’s rewind: Back in December 2024, Elvira Nabiullina was preparing to raise rates to 23%. But then she got a call—presumably from Putin—and instead held the rate at 21%. Since then, it's been a slow-motion surrender: from 21%, to 20%, and now 18%. All while the economy burns.

Between December and now, Russia has lost at least 1,000 soldiers per day. According to U.S. intelligence, the first half of 2025 saw the highest death toll since the start of the war. That’s not just a military catastrophe—it’s a labor collapse. The Russian workforce is being drained by the war machine.

When a country loses tens of thousands of working-age men, labor scarcity pushes up wages, delays production, and drives prices higher—especially in construction, transport, and logistics.

At the same time, Putin is slashing public spending. Inflation has remained in double digits for months. Any responsible central bank would hold—or even raise—rates under these conditions. But not Russia’s. Under pressure from the Kremlin and oligarchs desperate to lower their borrowing costs, the central bank has capitulated.

The claim that inflation is “contained” is a lie. No economy—especially not a sanctioned, overstretched, labor-starved one—can stabilize prices right after a fiscal and military spending binge. Even the U.S., with full industrial capacity and intact labor markets, needed two full years of tight policy to tame inflation.

Russia is already in stagflation: high inflation, collapsing growth, and a labor shortage. And now it’s cutting interest rates.

We’re about to see something new: a government trying to lower borrowing costs while drowning in stagflation. The Kremlin has made its choice. It doesn’t care about ordinary Russians. It’s protecting the oligarchs—for now.

Elvira Nabiullina, Russia’s Central Bank Chief, probably told herself she wouldn’t look at the lives Putin was destroying. That she would focus on protecting Russia’s economy.

But that’s the lie people tell themselves when they work with the devil—that they’re minimizing harm. It never works that way. Sooner or later, you become part of the harm.

And now she is. By repeatedly cutting interest rates, Nabiullina isn’t saving Russia. She’s helping Putin destroy the lives of millions of Russians—the very people she once claimed to protect.

I don’t think Russia has reached collapse territory yet. But they’re doing everything possible to get there—and with mounting pressure, they have no real choice but to start scaling back their war spending.

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