how did the soviet union go broke?

Question

How did they loose all their money?

Answer 1

All of the above answers are good and true. I think the key to it all is simply that communism causes individual initiative to come to a crashing halt. It is very true that military spending sent them into a tailspin but look at the amount we spend. There are just no entrepreneurs, no reason to strive under the communist system. Why would you work harder than the next guy at your job when you will both be paid the same. If he comes up with a super duper idea he really doesn't get anything out of it besides maybe a "thanks". To me that is the real reason for the economic collapse.

Answer 2

First of all, they were going to collapse, as they did, or transform to a market economy, as China did. Communism was a bad idea doomed to failure.
Second, and more immediate, Ronald Reagan's administration increased spending on strategic weapons like a theatre anti-missile defense system that would have required the Russians to upgrade their strategic ballistic missile systems, for 100s of billions of dollars. They just could not afford it.
Third, Eastern Europe's Iron Curtain was collapsing. Poland was ungoing upheaval under the Solidarity union. East Germany was losing dozens of young people daily who were defecting to West Germany.
That all created the perfect storm and the Soviet Union's time ran out.

Answer 3

They basically spent too much money trying to outdue teh United states in the military spending(of forces, and bombs, etc.)

the US decided that they were going to spend more money to ensure that they have a bigger force than the soviets, and vice versa) and since the /us had a bigger economy at the time, they were able to over due them to the point where the Soviet union was in debt to itself to the point of bankruptcy..

thats the simplified version

Answer 4

In addition to the great answers all ready posted, another factor existed. As stated, they needed to develop economically. The farmers (or collectives) may have produced great yields but had no way to get their products to market. People in the cities were rationed foodstuffs as a result. There was no "middleman" and the central bureau lacked the organization (logistics) and infrastructure. Their military spending equated to 2/3 of the GNP. The USSR was primarily an agrarian society so this had as much impact as military spending.

Answer 5

Going on from the previous poster, I agree about the lack of initiative. There was nothing to drive inovation or hard work (beyond propaganda and fear campaigns). Without market forces, many factories produced useless items. For example, a factory might have a quota to produce 4 million boots. Because they weren't subject to market forces and didn't actually have to sell the boots, they sometimes did stupid things like make 4 million boots, but all for the left foot and all size 9. As ridiculous as it sounds, they'd met their production quota & that's all that mattered.

Answer 6

Same as the USA is doing. Spending too much money on foreign wars and not enough on the infrastructure for their own people.

Answer 7

Spent too much on building up a military and didn't focus on their economy.

Answer 8

they spent too much money to cope up with US like spending it for space explorations. their problem is that they forgot to think that money is not always there