>In the U.S. the Reagan Administration increased the budget for the military and presented the possibility that it would implement a Star Wars antiballistic missile system. To maintain a parity with the U.S. under those developments would have required an even larger share of industrial output going to the military. The planners and decision-makers had to face the fact that it was economically impossible for the Soviet Union to increase the share of its output going to the military. The Soviet authorities then ended the arms race and called off the Cold War. When the justification of an external threat was removed there was no reason for the Russian public to toleratestat the totalitarian regime and the political system fell apart.
>Part of the military buildup of the Soviet Union was in tens of thousands of tanks. They had 25 thousand in East Germany alone. They were very pleased and confident with this vast superiority in tanks. This confidence held up until President Jimmy Carter announced that he was considering the development of a neutron bomb. The neutron bomb would produce armor-piercing radiation which would kill the crews of tanks but leave the tanks unharmed. This would have made the tank force of the Soviet Union not only ineffective but a danger since enemies could take over the tanks after the crews had been killed and use them against the Soviet Union. The Soviets organized an international peace campaign against the neutron bomb. It was run by the KGB office near Moscow. It was effective enough to get Jimmy Carter to cancel the development of the neutron bomb only a year after he announced its consideration.
>The budget increase for the military came at the expense of investment in the rest of the economy. Nikolai Leonov, a general in the KGB, described the result as follows:
First there was a visible decline in the rate of growth, then its complete stagnation. There was a drawn-out, deepening and almost insurmountable crisis in agriculture. It was a frightening and truly terrifying sign of crisis. It was these factors that were crucial in the transition to perestroika.
>Gorbachev and Yakoblev did not intend to dismantle the communist system. Instead they intended to make it work.Years after the fall of the Soviet Union, Yakoblev said in an interview
It seemed to us that all we had to do was to remove some prohibitions, some brakes. Free everything up and it would start to work. It would work. There is a good engine there. It has got a bit old and rusty. It needs oil. Then just press the starter and it will set off down the track. And we went along under this illusion for one and half to two years.