by Richard Poe
March 27, 2007

Defeat in Iraq would spell ruin for the U.S. economy. Our past experience in Vietnam makes this clear.

Under pressure from anti-war Democrats, President Richard Nixon began withdrawing U.S. troops from Vietnam prematurely, before the job was done. He announced what became known as the “Nixon Doctrine” in a press conference of July 25, 1969 on the island of Guam. There Nixon stated:

“…we shall furnish military and economic assistance when requested in accordance with our treaty commitments. But we shall look to the nation directly threatened to assume the primary responsibility of providing the manpower for its own defense.” (1)

With these words, Nixon indicated that America would no longer spend her blood freely in defense of foreign peoples. Henceforth, foreigners under seige from communist forces would have to fend for themselves.

While the war still raged, Nixon began recalling U.S. troops from Vietnam. Some 540,000 American troops were deployed in Vietnam when Nixon took office on January 20, 1969. One year later, that number had fallen to 280,000. (2)

Nixon’s retreat brought predictable results.

Sensing American weakness, foreign investors rushed to cash in their U.S. dollars for gold. The panic threatened to empty Fort Knox. On August 15, 1971 — with only 280 million ounces of gold remaining in the U.S. Treasury — Nixon declared that U.S. dollars, in most circumstances, would no longer be redeemed for gold. (3)

Egypt and Syria invaded Israel on October 6, 1973, calculating that a wounded America would be powerless to intervene. The Arab members of OPEC (Organization of Petroleum Exporting Nations) announced a petroleum embargo against the United States on October 17.

Israel survived the onslaught, but many U.S. companies around the world were less fortunate. In their book The Great Reckoning, economic historians James Dale Davidson and Lord William Rees-Mogg write:

“The international monetary system collapsed, leading to currency fluctuations and disorder in the world pricing system. This was followed in short order by the OPEC shock — the most widely noted part of a 3,400 percent increase in international grand larceny. Third World governments, emboldened by the defeat of the United States in Vietnam, stole overseas American investments almost at will. Economic growth in the years after 1973 fell worldwide by 50 percent.” (4)

The post-Vietnam economic catastrophe reached its finale in the double-digit “stagflation” of the Jimmy Carter era.

Before we reenact this dismal episode of our history, Democrats and dovish Republicans alike need to level with the American people, telling them plainly that surrender in Iraq will impoverish our nation, vaporize Americans’ savings, eliminate jobs, and drive U.S. homeowners into foreclosure.


1. See also, “Informal Remarks in Guam with Newsmen, July 25, 1969” in Public Papers of the Presidents: Richard M. Nixon 1969, (Washington, D.C., U.S. Government Printing Office, 1970), page 359; and “Annual Foreign Policy Report, 18 February 1970”, in Public Papers of the Presidents: Richard M. Nixon 1970, pages 118-19; cited in Professor Bernard Reich and Major Stephen H. Gotowicki, U.S. Army, “The United States and the Persian Gulf in the Bush Administration“, Royal United Services Institute and Brassey’s Defense Yearbook, 1991, London: Brassey’s (UK).

2. Stanley Karnow, Vietnam: A History (New York: Viking Press; 1983), 682-83

3. Hon. Ron Paul of Texas, “The End of Dollar Hegemony“, Before the U.S. House of Representatives, 15 February 2006; “Address to the Nation Outlining a New Economic Policy: ‘The Challenge of Peace.’ August 15, 1971“, Public Papers of the Presidents, Richard Nixon, Containing the Public Messages, Speeches, and Statements of the President, 1971, (Washington: Government Printing Office, 1972), pp. 886-890.

4. James Dale Davidson and Lord William Rees-Mogg, The Great Reckoning: Protect Yourself in the Coming Depression (New York: Simon & Schuster; 1993), 30