Indeed, that was part of the equation. Some books report that the USSR spent as much as 60% of GDP on the military during the height of Reagan’s military spending. Also, despite our military increases, we still did not dedicate a huge percentage of GDP in military spending. That is, military spending did not demand as much of our GDP as it did that of the Soviets.
Army Air Corps more precisely states what I was getting at. The Reagan build-up (600 ship Navy, Pershing Missiles in West Germany, etc.) hastened the fall. SDI really scared the Soviets, but it was only part of what they had to respond to.
There is the story about Reagan that I do not know is actually true, though it captures his approach. Estimates of Soviet power and analyses of the US/USSR relationship focused on Soviet strengths to which the US should respond. Reagan and his staff also wanted Soviet weaknesses analyzed and exploited. Hence the use of economic as well as military means.