The politics behind the arms race is important and interesting in its own right, and played a vital part in the outcome of WW2.
As the earlier part of this thread suggests, the Red Army would eventually gain the huge predominance against Germany that it lacked until the tide was first checked in 1942 then turned in 1943. Germany was seen as the aggressor, plain and simple. It was the German occupation of Bohemia that was the critical watershed. Czechoslovakia was indisputably a non-German ethnic country in a way none of the earlier annexations were. It was here that Germany irrevocably crossed the line. Stalin was asked by both Britain and France to help defend Czechoslovakia. Stalin was willing to do so, but the Czechoslovaks didn't want Russian intervention.
So Chamberlain bought "peace for our time" by giving Germany the Sudetenland (German-speaking western borderlands of Bohemia), so stripping Czechoslovakia of its defences. Once Hitler broke this agreement by occupying all of Bohemia and setting up a Slovak puppet regime, and then began escalating his threats against Poland over the Danzig Corridor, Britain and France felt obliged to guarantee Polish independence ("this far and no further"). This meant that Stalin could enter a pact with Germany and if Hitler did invade Poland, Stalin could let Britain and France go to war with Germany, leaving the Soviets time to rearm, hence the political carve-up of Eastern Europe known as the
Molotov-Ribbentrop Pact.
It was this pact that enabled Hitler to invade and occupy Western Poland while Stalin moved in on the Baltic States and Eastern Poland (yet another of the several “Partitions of Poland” down the centuries). The Pact also covered Hitler's back so that once Britain and France had declared war, Hitler attack Norway, the Low Countries and elsewhere (then France and Britain), while Stalin opened the Winter War against Finland.
Hitler soon realised that Britain could not be quickly defeated, if at all, unless morale cracked and Britain caved in. Once Churchill had ousted Chamberlain as PM, this became increasingly remote. Further east, Stalin needed 3 or 4 years to rearm to the point at which Hitler could be military challenged. So in my view, Hitler abandoned what was appearing to be a half-hearted attempt at Britain. He couldn’t afford to let Soviet military strength grow behind his back, while he tried to defeat Britain in a long drawn-out war.
The Molotov-Ribbentrop Pact benefited both parties. German’s jump-off would be that much further east while Soviet defences would be that much further west. Stalin bought a breathing-space to rearm but Hitler turned east sooner than Stalin hoped (despite desperate attempts to appease Hitler, diplomatically and with rush deliveries of strategic exports), and the USSR paid a heavy price.