Budget Deficits and Foreign Policy

03/21/11 Baltimore, Maryland – There are things that are “seen”… and those that are “not seen.”

Seen:

Saturday, on the eighth anniversary of the invasion of Iraq, the United States opened up a third front in the “Forever War.” US, British and French warplanes carried out air strikes to enforce a “no-fly zone” over Libya.

When George H.W. Bush established a no-fly zone over parts of Iraq after the 1991 Gulf War, it was enforced with routine bombing for 12 years until his son ‘W’ sent in ground forces.

What, we ask with all the feigned interest we can muster, is the endgame in Libya? A cease-fire in their nascent civil war? “Regime change”? Oil exports diverted from their destinations in Europe and China…?

Does it matter?

“Circumstances will drive where this goes,” says Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. And because “circumstances” have a funny way of getting out of hand, oil is again within a couple bucks of the high it set two weeks ago.

Precious metals are reacting too. Gold is up to $1,431. Silver is a nickel away from $36.

Not seen: “With whopping budget deficits of more than $1 trillion per year, a national debt of more than $14 trillion, and the US military already overstretched by two drawn-out occupations,” muses foreign policy analyst Ivan Eland, “one would think some sort of ‘Vietnam Syndrome’ would have set in.”

Not so.

“Traditionally, the foreign policy elites of declining empires have never accepted the need to retrench overseas before it was too late.”

And so it goes.

Addison Wiggin
for The Daily Reckoning

Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, an independent financial research firm based in Baltimore, Maryland. His second editions of international best-sellers Financial Reckoning Day Fallout and The New Empire of Debt, which he co-authored with Bill Bonner, were updated in 2009. His third book, The Demise of the Dollar… and Why it’s Even Better for Your Investments was updated in 2008, the same year he wrote I.O.U.S.A.  ??

Wiggin is the executive producer and co-writer of I.O.U.S.A. an acclaimed documentary nominated for the Grand Jury prize at the 2008 Sundance Film Festival and the 2009 Critics Choice Award and shortlisted for a 2009 Academy Award. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. 

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