Military

USSR military

U.S military

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.

Oil Glut

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.

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