How did Reagan's cold war military policy affect the economy

The economy went into a financial boom and created more that 20 million new jobs.

Reagan's economic policies (personal tax rate reduction, deregulation) resulted in one of the biggest booms in History of the United States of America - an economic expansion of unparalleled magnitude: more than 20 million new jobs (half of them "high paying" - i. e. higher than the median wage), reduction in unemployment to 15-year lows, some $30 trillion of wealth created. [The Reagan Boom - Greatest Ever]

The flip side was increased gov't spending, and an increase in the deficit.