From Stratfor:
Gorbachev began to see the deep cracks in the system. He publicly denounced his predecessor, dubbing Brezhnev's rule the "Era of Stagnation." Many Soviet citizens considered Brezhnev's administration a time of prosperity and military might that put the Soviet Union on equal footing with the United States. Nonetheless, Brezhnev had set up a structure that could not be sustained in the absence of enormously high oil prices. As a result, the Soviet government was forced to start running a budget deficit and to borrow on international markets — unheard of in previous Soviet eras. In short, the Soviet Union was going bankrupt. Meanwhile, between the brutal and fruitless war in Afghanistan, the Soviet military's downing of a civilian Korean Air Lines flight and the Chernobyl nuclear disaster, the rest of the world was beginning to see the cracks as well…
Putin has fallen into the same trap that lured Brezhnev, then left Gorbachev to pick up the pieces. The Russian system is vulnerable to shocks, both internal and external. It will be able to muddle along for many years to come — much as the ailing Soviet system did in the late 1970s and early 1980s — thanks to Putin's enduring popularity and his cronies' resistance to reform. Still, it is becoming more obvious that, facing problems at home and pressures abroad, Russians in and out of government are starting to consider the country's next stage. Today's decisions will affect the country for decades. The problem is deciding what will take priority…
Though Russia could pull out of its economic slump in a few years, the dearth of foreign investment today will delay large projects, particularly in the oil sector, in the future. Eventually, this will impair oil production. Proponents of liberal reform therefore advocate scaling back foreign military campaigns and conceding on Syria and Ukraine to mend ties with the West and reinvigorate investment in Russia. On the other hand, as NATO builds up on Russia's borderlands, Moscow needs to project a strong military presence, not only to deter further encroachment but also to maintain domestic support. This gives rise to another pressing issue. Russia's military is in desperate need of modernization, and if the Kremlin does not invest now, then the military will fall behind in the long term relative to its peers. But how will the Kremlin finance the makeover — with money taken from its already lean social spending budget or by putting off energy investment?
