The 4% "Solution"—
Constant 2001 Dollars

See Comment 381

Perceptive viewers will note that the Reagan build-up actually began under Carter and only lasted 5 years.  It peaked in 1985.  By the time the Soviet Union collapsed, the US defense budget had been heading down for 5 years. For this reason, it would be difficult to make a case that US defense spending caused the end of the Soviet state.  In fact, it succumbed to a variety of internal fractures, all exacerbated by the failures of the communist economic system.  Oddly enough, the defense sector was its most successful component, preserving a degree of competition among design bureaus and claiming first access to available investment funds.

The Clinton years, far from starving defense, merely returned to the historical spending pattern of the Cold War.  By the time of Clinton's inauguration, of course, the primary threat used to justify Cold War budgets, the Soviet Union, had disintegrated 2 years earlier, and Russia's efforts to develop advanced weapons had ground to a crawl (to the extent they continued to function at all).

Charts and Data