section_path: New Cold War (1979–1985)/US and USSR military and economic issues
section_name: US and USSR military and economic issues
paragraph_text: US and USSR military and economic issues
  
  The Soviet Union had built up a military that consumed as much as 25 percent of its gross national product at the expense of consumer goods and investment in civilian sectors. Soviet spending on the arms race and other Cold War commitments both caused and exacerbated deep-seated structural problems in the Soviet system, which experienced at least a decade of economic stagnation during the late Brezhnev years.
  
  Soviet investment in the defense sector was not driven by military necessity but in large part by the interests of the nomenklatura, which was dependent on the sector for their own power and privileges. The Soviet Armed Forces became the largest in the world in terms of the numbers and types of weapons they possessed, in the number of troops in their ranks, and in the sheer size of their military–industrial base. However, the quantitative advantages held by the Soviet military often concealed areas where the Eastern Bloc dramatically lagged behind the West. For example, the Persian Gulf War demonstrated how the armor, fire control systems, and firing range of the Soviet Union's most common main battle tank, the T-72, were drastically inferior to the American M1 Abrams, yet the USSR fielded almost three times as many T-72s as the US deployed M1s.
  
  By the early 1980s, the USSR had built up a military arsenal and army surpassing that of the United States. Soon after the Soviet invasion of Afghanistan, President Carter began massively building up the United States military. This buildup was accelerated by the Reagan administration, which increased the military spending from 5.3 percent of GNP in 1981 to 6.5 percent in 1986, the largest peacetime defense buildup in United States history. The American-Soviet tensions present during 1983 was defined by some as the start of "Cold War II". Whilst in retrospective this phase of the Cold War was generally defined as a "war of words", the Soviet's "peace offensive" was largely rejected by the West.
  
  Tensions continued to intensify as Reagan revived the B-1 Lancer program, which had been canceled by the Carter administration, produced LGM-118 Peacekeeper missiles, installed US cruise missiles in Europe, and announced the experimental Strategic Defense Initiative, dubbed "Star Wars" by the media, a defense program to shoot down missiles in mid-flight. The Soviets deployed RSD-10 Pioneer ballistic missiles targeting Western Europe, and NATO decided, under the impetus of the Carter presidency, to deploy MGM-31 Pershing and cruise missiles in Europe, primarily West Germany. This deployment placed missiles just 10 minutes' striking distance from Moscow.
  
  After Reagan's military buildup, the Soviet Union did not respond by further building its military, because the enormous military expenses, along with inefficient planned manufacturing and collectivized agriculture, were already a heavy burden for the Soviet economy. At the same time, Saudi Arabia increased oil production, even as other non-OPEC nations were increasing production. These developments contributed to the 1980s oil glut, which affected the Soviet Union as oil was the main source of Soviet export revenues. Issues with command economics, oil price decreases and large military expenditures gradually brought the Soviet economy to stagnation.
  
  On 1 September 1983, the Soviet Union shot down Korean Air Lines Flight 007, a Boeing 747 with 269 people aboard, including sitting Congressman Larry McDonald, an action which Reagan characterized as a massacre. The airliner was en route from Anchorage to Seoul but owing to a navigational mistake made by the crew, it drifted from its original planned route and flew through Russian prohibited airspace past the west coast of Sakhalin Island near Moneron Island. The Soviet Air Force treated the unidentified aircraft as an intruding U.S. spy plane and destroyed it with air-to-air missiles. The Soviet Union found the wreckage under the sea two weeks later on 15 September and found the flight recorders in October, but this information was kept secret by the Soviet authorities until after the country's collapse. The incident increased support for military deployment, overseen by Reagan, which stood in place until the later accords between Reagan and Mikhail Gorbachev. During the early hours of 26 September 1983, the 1983 Soviet nuclear false alarm incident occurred; systems in Serpukhov-15 underwent a glitch that claimed several intercontinental ballistic missiles were heading towards Russia, but officer Stanislav Petrov correctly suspected it was a false alarm, ensuring the Soviets did not respond to the non-existent attack. As such, he has been credited as "the man who saved the world". The Able Archer 83 exercise in November 1983, a realistic simulation of a coordinated NATO nuclear release, was perhaps the most dangerous moment since the Cuban Missile Crisis, as the Soviet leadership feared that a nuclear attack might be imminent.
  
  American domestic public concerns about intervening in foreign conflicts persisted from the end of the Vietnam War. The Reagan administration emphasized the use of quick, low-cost counterinsurgency tactics to intervene in foreign conflicts. In 1983, the Reagan administration intervened in the multisided Lebanese Civil War, invaded Grenada, bombed Libya and backed the Central American Contras, anti-communist paramilitaries seeking to overthrow the Soviet-aligned Sandinista government in Nicaragua. While Reagan's interventions against Grenada and Libya were popular in the United States, his backing of the Contra rebels was mired in controversy. The Reagan administration's backing of the military government of Guatemala during the Guatemalan Civil War, in particular the regime of Efraín Ríos Montt, was also controversial.
  
  Meanwhile, the Soviets incurred high costs for their own foreign interventions. Although Brezhnev was convinced in 1979 that the Soviet war in Afghanistan would be brief, Muslim guerrillas, aided by the US, China, Britain, Saudi Arabia and Pakistan, waged a fierce resistance against the invasion. The Kremlin sent nearly 100,000 troops to support its puppet regime in Afghanistan, leading many outside observers to dub the war "the Soviets' Vietnam". However, Moscow's quagmire in Afghanistan was far more disastrous for the Soviets than Vietnam had been for the Americans because the conflict coincided with a period of internal decay and domestic crisis in the Soviet system.
  
  A senior US State Department official predicted such an outcome as early as 1980, positing that the invasion resulted in part from a:
  
  ...domestic crisis within the Soviet system.... It may be that the thermodynamic law of entropy has... caught up with the Soviet system, which now seems to expend more energy on simply maintaining its equilibrium than on improving itself. We could be seeing a period of foreign movement at a time of internal decay.