- The USSR had built up a military that used 25 percent of its gross national product at the expense of investment in civilian sectors and consumer goods. Soviet spending on the arms race as well as other Cold War engagements caused and worsened deep structural problems in the system, which experienced at least ten years of economic stagnation in the late Brezhnev years.
- USSR investment in the protection sector was not motivated by military necessity, but mostly by the interests of massive party and state bureaucracies that were dependent on the industry for their privileges and power. The Soviet Armed Forces grew into the largest in the world with numbers as well as the types of weapons they possessed. However, the quantitative advantages often concealed areas where the Eastern Bloc significantly lagged behind the West.
By the early 1980s, the Soviet Union had built up a military arsenal and army that surpassed one of the U.S. Shortly after the Soviet invasion of Afghanistan. President Carter started building up the United States military. This buildup was quickened by the Reagan administration, which in five years increased the military spending from 5.3 percent of GNP to 6.5 percent, the most massive peacetime defense buildup in U.S. history.
Additional structure of its military, due to the immense army expenses, along with inefficient manufacturing and collectivized agriculture, were already a heavyweight for the Soviet economy. Meanwhile, Saudi Arabia increased oil production, and these developments added to the 1980s oil glut, which affected the USSR because oil represented the primary source of Soviet export revenues. Issues with oil price decreases, command economics, and significant military expenses slowly brought the Soviet economy to stagnation.