That is a popular myth but really the USSR military spending sloped up independent of external factors and while pervasive never moved the needle in terms of political problems.
Far more destructive we’re long term structural problems (inability to provide consumer goods, lack of various sorts of personal freedoms). These had been tolerable in extremis (post revolutionary fervor, rapid growth/modernization, a big war) but increasingly destroyed enthusiasm and then support formhe regime. Low oil prices were the trigger.
Also for perspective: Russia’s economy is about the same size as Australia’s (but has 6x the population). This doesn’t give them a lot of money to work with; asymmetric warfare is much more cost effective.
Russia has already signaled openly that they know they can't keep up on spending with the US and China. Their forward budgeting statements indicate a halt to the formerly rapid military spending growth. China is what this treaty withdrawal is all about.
Pretty soon the US will be adding a new Russia every year in new economic output. Russia is not a competitive threat with the US overall, only on select regional matters and on a few important weapons systems. The dumbest thing the US could do, is worry about bankrupting Russia.
And if the US wanted to do that, there's only one good option: tank the price of oil dramatically by pushing up the value of the dollar. That won't work very well here, because the dollar is already relatively high, the US is now vulnerable on oil as a huge industry (and will be more so in the near future), and inflation adjusted (eg back to 1995 or 2005) oil is almost cheap right now (and it's not tanking Russia, they can roughly hold their ground at current prices). The dollar is how the USSR was bankrupted, as they over-bet their economic security on oil output from 1970-1990. Russia is being far better run with regard to macro economic choices right now than the USSR was, which limits their exposure to bankrupting shocks (again, short of eg sustained $20 oil).
The primary hope on the containment front is probably that Russia's need to raise or at least maintain its social welfare output (against a zero growth economy) is checked by oil prices (held down by US shale output), forcing a choice between military spending and social welfare. That's happening right now and has badly soured Putin's popularity at home. Oil goes to $110 and Putin gets a lot more money to play with while also placating domestic demands.
Long and boring necropost, but still I want to add some PoV from inside.
By numbers provided by Rosstat Russia looks somewhat stable, but in reality internal economic there is going to break if it would be treated the same way as for now. Some of the problems:
The real inflation rate is way higher than salary grow, especially in 60-th percentile and below which means 60% of active workers who already have income lower comparable to China are become poorer each day.
Whooping 11+% rate for loans on housing: with quick calculations a family of two working parents who can't apply to a subsidized loan (less than 2 children or both are older than 35) would have to pay 61% of a single average net salary each month for a 2-room apartment outside of Moscow or St. Petersburg and 10% for housing expenditures, so they both have to live on $729 in current exchange rate, which would be not enough to raise a single child.
There was a historical event on the 3rd of December, 2018: average price for Regular Conventional gas in US went below the correspondent mark of gas in Russia and is still lower. Why? Russian oil companies (there are only 3 of them as of now) haven't heard of work efficiency and ROI, but can make citizen pay to them.
The two biggest expenditures in budget from 2017 are military (with other secret parts) and current pensions, the latter is a 20-year of fkups in pension reforms, currently each worker indirectly (employees pay these to government in addition to wages without any reports to employers) sends 22% of their salary to pay current pensions and that covers 30% of them.
Social welfare spending? Education and science fundings were cut twice last year.
Would provide sources if someone asks, I just don't have enough time to lurk back on them to get the links and most of them would show you texts in russian anyway.
The neocons assume the Russians can’t match the US for “tactical” nuclear capability and will stay put if, say, a small tactical nuke is used against an ally.
But the Ruskies have also been very clear that they are not going to spend insane amounts of money on an arms race. They’re stance is to go for the big fireworks early on in a potential conflict.
Also, don’t underestimate their arms industry. Their GDP is low, but their PPP GDP is not. They can build a twin engine fourth or fifth gen fighter at a fraction of the cost it takes us. A lot of the research for weapons has already been paid for by the USSR. They’re the second largest arms exporter brining in cash.
Also their weapons philosophy is to favor brutal efficiency. Their ABM over Moscow doesn’t try to hit a bullet with a bullet. It just set off a nuke in the skies over Lithuania.
Finally, weren’t the sanctions supposed to have bankrupt the Russians by now? They have very low debt, huge reserves (in Au, not their adversary’s paper).
Never mind balancing the budget; we can’t even pass a budget. The fed is forced to keep interests rates near zero because otherwise interest payments on a > 100% GDP debt become ruinous.
Far more destructive we’re long term structural problems (inability to provide consumer goods, lack of various sorts of personal freedoms). These had been tolerable in extremis (post revolutionary fervor, rapid growth/modernization, a big war) but increasingly destroyed enthusiasm and then support formhe regime. Low oil prices were the trigger.