The Soviet Union seemed to stay in direct competition with the United States for roughly 40 years; was this because they had a powerful economy and Communism actually made them into a wealthy nation, or was it more of an empty bluff of military and space investment?
Also, just out of curiosity, how did the Soviet Economy compared to independent Russia before and after the USSR?
Soviet economy was mainly about military industry, which, however, doesn't mean they were as poor as North Korea, after all they could provide for acceptable life expectancy, almost universal literacy and (until 60s) a fairly good level of gender equality. The GDP per capita ratio between US and USSR has been around 3:1 in America's favor for most of the time and it's still at the same level.
However, the only FMCG that were not sold by 'checks' (i.e. in unlimited amounts) were macaroni, salt, matches, bread, oil and sugar. If you wanted to buy a car you had to wait for several years in queue. Almost every consumer good was in deficit. And of questionable quality. So, yeah, Soviet economy sacrificed a lot of consumer comfort for its ambitions, that manifested in the form of military industry, rampant foreign aid to underdeveloped countries, etc.
If you want to compare Russian economy to Soviet, it's more convenient to compare Russian Federation and RSFSR. The collapse itself did not shift the overall trend. By mid 80s Soviet Union started to rely more and more on oil production and exports, this trend persisted through the collapse and decades after it. Perestroika's main goal was to shift economy from military industry to civil projects. As you see now, it failed. Nobody could predict to what extent the Soviet economy was buit around military-industrial complex, indirect effects were surprisingly terrific.
After the collapse the economy has been plunging until 1998, it picked up after that and reached the 1990 level in 2003. During that time the export as a share of GDP has been rising. And now metal and fuel export account for 30% of GDP as opposed to roughly 5% in early 70s.
Basically 60s edition Soviet Union has been slowly turning to become 2014 edition Russia by increasing mineral exports, with a more quick shift in the late 80s from military production to consmuer goods import.