How was Russia able to compete with the U.S. in the "Arms Race" during

Question:

How was Russia able to compete with the U.S. in the "Arms Race" during the cold war?

Forgive any historical ignorance on my part regarding this topic, however, it had always been my understanding that the aftermath of World War II left most European nations impoverished or economically depressed. Though Russia is part of Asia and not Europe, it still suffered tremendous losses due to the war did it not? Staggering casualties from that war coupled with a failed political, social, and economic system that was centuries old should have all but crippled the nation. Instead, the Soviet nation would go on to spend millions upon millions of dollars to compete with the U.S. on various playing fields. From space exploration, to military strength, to nuclear capability, Russia managed to remain competitive throughout the Cold War. Where did all the money come from?

Best Answer - Chosen by Asker: The Soviet Union, USSR.
A communist system of government does not need capital (money) to function. The value of money is the perception of value and is regulated by the state. The USA had lent (gave) the USSR tons of gold to keep there economy afloat. Not needing money internally the used the gold to purchase material that they could not get in the USSR from other countries. The USSR only needed gold/money when dealing with another non-communist country. Otherwise they functions on a batter system. You give me cement I give you oil. Etc.
Good Question.
The USSR lost 13% of its population during the war, how did they recover. Stalin had declared total war; everyone was involved in the war effort. Stalin had a huge number of political officers, every town every unit every factory every farm. This officer would regulate the war effort at there level. If the Germans got close then they were issued first shovels then guns.
Everyone was working if you wanted food you reported to the political officer you gave you your assignment if you did it you got food, clothes, the things you needed to live. People were breed. Proven soviet fighters were given extra women to breed good fighting children; the USSR did some of the same things the Nazis did.
After the war this system stayed in placed for now they had to rebuild. Plus they now had the wealth of the countries that they conquered Poland, East Germany, the Baltic States, the Balkans, Romania, Bulgaria, Hungary, etc. They took all they wanted. There was no intention of giving it back. Soviet troops looted all they wanted from the occupied territories.

The USSR has huge gas, oil, precious metals, and gold reserves. They would sell these to the west, and use the money to buy what they wanted. Even though gas was rationed in the USSR they still sold gas to the west. Building weapons was easy they had plenty of people to keep busy, they was no unemployment. Everyone worked. If you lived near a coal miner chances are you would be a coal miner. At 18 almost everyone was in the Army. Very few did not have to go. The state controlled every thing from planes to cars to houses to underwear. Where you worked and what you had.
So they did not need money they only needed people. The war actually help Stalin with his grip on power. He managed to eliminate most of his enemies in the war and now the USSR emerged from the war with superpower status.
Money is only paper. You can not eat it.