In the same announcement, Putin talks about how Russia was deceived and misled by the western powers into believing that their voluntary dissolution of the Soviet Union would allow Russia to be able to join the quote unquote “Civilized World” but for all their talk, their promises were false and they have continued to attempt dismembering Russia no matter in what form. And despite repeated attempts by Putin to work and cooperate with the west, there is no progress to be made. And for these reasons, this is why they are increasing their Military spending.

While I think he's broadly telling the truth - the Putin of the early 2000s did, IIRC, talk about joining NATO and I remember him being fairly chummy with people like Bush - I don't think this was a revelation he had in the last year. It was likely way back in 2014 that most of his remaining belief died that Russia could really be an equal partner in the West.

His recent reaction to Merkel's statement was similarly a bit of an act, I think. Him saying that he "didn't expect this" and so on doesn't correspond with reality, at least to me - he clearly saw after 2014 that attempts to stop Ukraine from arming and trying to take down the Donbass were futile because the United States wasn't really on board with it. Whether Merkel actually was trying to deceive Putin from the very beginning or instead she was simply too cowardly to stand up to the United States and NATO and say "You actually have to stop arming Ukraine for the Minsk agreements to work!" is, in this context, neither here nor there - Putin clearly saw that the deal wasn't working and made preparations to make Russia sanction-proof accordingly.

In addition, his statement that "maybe we should have started this conflict earlier then" is also not him being genuine; I think he's more trying to convey that he doesn't have any regrets about starting it, contrary to what the Western media, trying to mindread him, suggests. If Russia had gone fully into Ukraine while taking Crimea, or soon after, then while it might have been easier to take down Ukraine's military, the impact of the same sanctions that we saw this year projected onto 2014's Russia would have been much more detrimental, and the 15% GDP contractions that the "experts" projected back in February and March might have actually came true back then. (though Russia invading Ukraine in early 2020 while coronavirus was causing the initial global storm of concern would have been a very interesting parallel universe to be in).

I think Mercouris has made a similar point recently - that, while Ukraine strengthened in those 8 years, so did Russia; and perhaps Russia actually strengthened relatively more than Ukraine did. Ukraine's military back in 2014 would have collapsed within weeks. Ukraine's military in 2022, without outside help, would have fallen within perhaps two or three months, and certainly by the middle of summer - there's a reason why Zelensky initially agreed to try and negotiate in Istanbul.

The difference in Ukraine's strength is not very great at all. They spent those years building the Donbass strongholds up, and those are a massive problem, for sure, but on other fronts, Ukrainian resistance rapidly collapsed in the first month or two of the war. Meanwhile, Russia has strengthened to the point where the economic thermonuclear blast that was released on them this year, which would have sent most other nations tumbling to their knees, has achieved only to set back their economy by 3% in the worst current predictions, and perhaps half that for the better ones.