The budget crunch on defense and foreign policy has me thinking: While Congress is off on its merry pursuit of Passover or Easter and the White House is preoccupied with bringing peace (again!) to the Middle East, this is a good time to think about how we really ought to engage the world.

Not the phony baloney about the "indispensable nation," attributed to Madeleine Albright and believed by too many in Washington. There are plenty of folks ready to dispense with us, especially after the travesties in Iraq and Afghanistan.

Not the "declining power," which is only the shadow side of aggressive, neoconservative interventionism. It's all about our power, you see. With it, we "shape" the international environment (or just write the rules ourselves when we are being really outrageous). Without it, global security is done for and anarchy will break out -- terrorists on all fronts, nuclear weapons on every corner.

How about some plain old common sense? The United States is just another country -- a big one, with big interests and big capabilities, but still just one in a world crowded with countries and problems that need to be solved. We cannot write all the rules; we can influence some of them. We cannot shape neighborhoods whose traumas and dilemmas are up close and personal to them (see Israel-Palestine, or China-Japan). Too often in the last 10 years we have tried to write the rules, only to create new adversaries or stir up old ones.

I am not making a plea for withdrawal, but for modesty -- modesty in ambition and expectations. It's a good moment for modesty. Everyone's resources are stretched; internal dilemmas (some with external instigators -- see Russian money and Cypriot banks for a nice synergy) are barking at every national and regional door.

John McCain called people who see wisdom in modesty "wacko birds" the other day, and Stephen Kinzer picked it up in his Guardian column today.

Well, count me a wacko bird, who wants neither to intervene with the Marines or special operations forces, nor to withdraw, but rather to remain engaged.

I will add my own twist to the wacko-bird manifesto. As we define more modest engagements, we need to demilitarize our foreign policy machinery so that we don't define every issue as solvable with military force. The Pentagon and the uniformed military should not define the framework for our global engagement; they should proudly and competently support our statecraft.

We should be sending advisors to governments seeking to create effective, efficient, and accountable governance, not sending "security" trainers to beef up other countries' militaries and internal police forces before local civilian officials know how to handle them.

We should have a diplomatic and foreign assistance capability that can prevent and resolve conflict and advise on governance, not one that backs away from this kind of engagement and restricts itself to representing the United States and reporting on events. And we should use this capacity modestly, for the task is large and we cannot "shape" it either alone or in our image.

A changed perspective on how we engage the rest of the world is a big part of the answer to the endless thrashing about of the past 20 years. Liberal international interventionists have had their day, and paid the price. Conservative regime changers have shamed themselves adequately (though to read the reviews on Iraq 10 years later, there seems be a shortage of shame. Doug Feith? Really?)

Time for the wacko birds. Sign me up.

Amid all the hyperbole about sequestration's impact on national security, it is interesting to note that, after next year, the defense budget will actually begin to grow again.

Makes no sense, you say? You thought sequestration cut defense? Indeed, it does. If you take the FY 2013 defense budget that was just passed by Congress and let the sequester happen, the Pentagon's funding will have been cut roughly 23 percent in constant dollars (including war costs) since it peaked in FY 2010.

But take a closer look.

Under the defense budget that Leon Panetta proposed to meet the "caps" that the Budget Control Act (BCA) originally imposed on discretionary spending, the Pentagon would get about $5.1 trillion over FY 2013-2021. But if the sequester holds, lowering those caps through FY 2021, DOD will get only about $4.6 trillion. In other words, sequestration will lower the military's projected funding by about $460 billion.

But, if you go year by year, the picture looks a little rosier. In FY 2014, the defense budget ticks down, again, about 2 percent below FY 2013 -- the first fiscal year subject to sequestration. That further reduction happens because in January legislators shoved some of the adjustment in the BCA caps off into FY 2014, instead of taking all of it in FY 2013.

Then, something interesting starts to happen. According to CBO scoring (the best in town, sorry OMB), the defense budget starts to go up again, about 2 percent growth per year. Take out the inflation, it creeps upward about half a percentage point every year from FY 2015 to FY 2021, in constant dollars.

This would be good news to the Pentagon. Of course, it would rather not have the sequester -- aside from a few Tea Party types, who does? -- but the automatic cuts sequestration brings are a one-time thing. Once we are in the FY 2014 budget-planning cycle, the Pentagon has less money but 100 percent planning flexibility. So it can actually make choices and move monies around without a meat cleaver over their heads. And, if the numbers hold, the defense budget will start to grow again.

The tricky bit for Pentagon officials is that they have to start cutting spending now. Unfortunately, the FY 2014 budget they are about to send Congress assumes that the sequester will be lifted. So when the budget comes, CBO officials (bless them) are going to say, hey, the new Pentagon budget for FY 2014 is something like $50 billion above its cap. And we will start the defense budget hysteria all over again.

Stay tuned for the fun.

It is the budget war, and the Pentagon has not given up fighting -- to the point of creating an endless stream of propaganda-like appearances and news pieces, many of them circulated by the American Forces Press Service.

These cute 2-3 minute video pieces are usually introduced by a uniformed officer or senior enlisted person, as if they were straight news and information pieces. They have been clogging the Pentagon's Daily Digest Bulletin, and my in-box, for weeks.

They were highlighted last week by my colleague Mark Thompson, of the TIME Battleland blog with the title "None Dare Call it Propaganda." They tell the sad tale of the sequester's damaging impact on the DOD health system, the suspension of tuition assistance, the loss of readiness.

Sometimes they are right -- civilian furloughs would lead to lower income for the last seven months of the year and, as a result, lower contributions to a civilian's TSP account. Sometimes they are exaggerations -- Gen. Dempsey yet again telling us military readiness will fall off a cliff, when, managed properly, it will not.

And sometimes they are pure fiction. The fiction type appeared in Saturday's Daily Digest Bulletin with the alarming headline: "Sequestration Threatens to Force Service Members to Quit."!!! This postage stamp of a video (30 seconds) culls an excerpt from the visit to Ft. Lewis-McChord of Sgt. Major Bryan Battaglia, said to be a "top advisor" to Joint Chiefs Chairman Martin Dempsey.

Battaglia, on camera, says that one effect of sequester is that there will "probably" be an increase in the numbers of soldiers, sailors, and airmen "that will have to leave our force." The unnamed uniformed reporter in the piece then quotes unnamed "officials" as saying that while some force reductions are planned and others will happen by attrition, "many will simply be laid off."

It is hard to imagine a longer string of misinformation. Military personnel, their pay, and their benefits are exempt from the sequester; there ought to be no military layoffs at all as a result of the automatic cuts. Moreover, reductions in the ground force are already underway, independent of sequestration, returning the ground forces to roughly where they were before the addition of 100,000 troops to rotate through Iraq and Afghanistan.

That decline in the ground force is normal after a war, and not a result of the sequester. And it is likely to continue, as a consequence of a drawdown in the defense budget. Sequestration is not the cause; the drawdown is.

In all likelihood, the shrinking of the Army and Marines will happen by attrition, since we lose about 15 percent of Army enlistees every year. In the 1990s, the reduction of the overall military force by nearly 700,000 was accomplished largely by attrition. "Buy outs" come next, if the separation is involuntary. But pure layoffs almost never happen.

So I can only classify this report as propaganda: a message intended to inflame, but lacking analysis and seriously distorting the facts.

Make no mistake. We are in a defense drawdown. It's time to manage that process, instead of conducting silly propaganda exercises. And it's time for Secretary Hagel to bring some discipline to the American Forces Press Service, along with the rest of the Pentagon.

The Senate appropriators have been struggling all week to complete a companion bill to the one passed in the House last week, providing money for this fiscal year for DOD and several other federal agencies.

The disagreements and more than 100 potential amendments (easier to offer in the Senate than in the House) have delayed consideration into next week, but it looks likely that there will be an FY 2013 appropriations bill for the Defense Department before they adjourn for Easter.

Meanwhile, both the House and Senate Budget Committees have reported out longer-term budgetary plans -- the budget resolutions -- that look at FY 2014 and beyond.

There is a fundamental reality about what the Congress is doing, one on which Secretary Hagel must focus. The signals are clear: The Senate and the House are not going to use the appropriations bills or the budget resolutions to bail out DOD from the sequester and a long-term drawdown in the defense budget. Time to wake up and smell the coffee.

Flexibility to deal with sequestration was one such signal. The House appropriations bill did not give DOD any greater flexibility than it now has to reprogram or transfer monies between accounts. It did increase operations funding, like the administration had requested, which raises the baseline from which sequestration would happen. And it provided some legislative relief from provisions in last year's defense budget, which would have hamstrung DOD unless they got a new bill covering this year.

Sen. Barbara Mikulski made a more direct attack to provide transfer flexibility. But it failed, and the reason for the failure is significant: Unless every agency got that flexibility, it was clear that it was not going to pass. Defense was not going to get special treatment.

Signal two is in the budget resolutions. As I noted earlier this week, Chairman Ryan's bill folded on the hope that DOD might get more funding in the long-term than the Budget Control Act caps passed in August 2011. He tried that last year and it went nowhere -- it wasn't even useful to Mitt Romney, who argued in his campaign that DOD should get four percent of the Gross Domestic Product.

This year, he abandoned that trench for the next one: holding the line at the BCA level for the next 10 years. That's probably the high-water mark, because Sen. Patty Murray's proposal takes another $240 billion out of the BCA funding levels over the next ten years.

The administration is going to send up its budget, one day. Maybe in early April. And it is going to be a mythical beast that ignores the signals. It will hope for the BCA levels, which is just plain unrealistic.

Secretary Hagel is supposed to send out guidance for the Department's next Quadrennial Defense Review next week. If realism is going to set in at DOD, that guidance had better make the QDR a resource-driven effort and start looking at decisions and options at budget levels below the BCA caps. That would send the internal signal the services need to hear.

Well, the first round in the FY 2014 budget wars has begun. The Republicans, led by Paul Ryan, have made their latest offer in the non-stop non-negotiation on taxes and spending. And when it comes to defense, the Ryan Express is true to form: full of empty boxcars and misleading data.

The goal of the proposed resolution is, as it was last year, to "protect defense." Now, to be fair, his defense number -- $560 billion -- is about $15 billion below his number in last year's resolution. Slight dose of realism there.

But basically the Ryan Express defense boxcar is empty of any contribution to deficit reduction. It seeks to reverse the sequester on defense spending, something it does not do on the domestic side, by holding the defense budget flat (last year's budget plus inflation) for the next 10 years -- as if sequester never happened and never would, either.

Not enough, says the Heritage Foundation; more than we need or the Defense Department will ever see, say I. That level of funding would give DOD more than $6 trillion over the next decade. Heck, they will be lucky to see $5.2 trillion, in my view -- or something like a 20 percent cut in constant dollars below that flat line.

And there is a really misleading number in the middle of Ryan's discussion of the sequester's impact on the defense budget. Ryan says: "Though defense is about 20 percent of the budget, it's absorbing 50 percent of the cuts." This assertion takes the Express right off the rails.

Defense is only 20 percent of the budget if he includes entitlement spending. But entitlement spending is virtually immune from sequestration. The sequester hits discretionary spending -- the funds the appropriators provide each year to the federal agencies. Defense is more than 50 percent of discretionary spending, which doesn't make the sequester formula look so unfair, after all.

But, then, Ryan wants it to look unfair, hoping the Washington data mavens will miss the subtle change.

This Express is not going to move very far, very fast. It returns us to pre-sequestration days and is on a collision course with what Sen. Patty Murray is crafting in the Senate Budget Committee as we speak. Stay tuned for the sounds of the train wreck.

There were always two shells in the double-barreled shotgun aimed at the Defense Department. One was sequester. The other -- the one the Pentagon was really worried about -- was the continuing resolution that expires March 27.

Well, now, the Congress has just begun to unload one of the two barrels. Although sequester is still underway, the House has removed a big source of the Pentagon's "sequesteria" by passing a real appropriations bill for the Department of Defense and the Department of Veterans Affairs. (The rest of government will have to make do with the continuing resolution, which the bill prolongs through the end of the fiscal year.)

The bill, from the chairman of the House Appropriations Committee, Harold Rogers, did not attempt to fix the sequester -- as I predicted last week, that was too high a hurdle -- but it does make it easier for the Pentagon to survive. In writing a full appropriations bill, Rogers gave the Obama administration pretty much all the money it asked for in its request for crucial operational accounts. The bill increases the funds for operations and maintenance by more than $10 billion above the FY 2012 (and, thus, the continuing resolution) level.

That doesn't eliminate the sequester, but it raises the baseline from which sequester is measured for the accounts most directly affected. That gives some relief to the services, easing about 25 percent of the pain they see coming. And, who knows, if there is actually progress on the broader budget negotiations the president is lobbying for, the whole sequester thing itself might become meaningless.

That's the other big takeaway since we moved into sequester-land last Friday. Everybody is suddenly making nice. The president is phoning the Hill, even talking to Republicans. And Barbara Mikulski, the new chair of the Senate Appropriations Committee, wants to write a bill similar to the House legislation, perhaps providing real appropriations language for a few more agencies and departments, rather than just prolonging the continuing resolution for everyone but DOD and Veterans Affairs.

So the March 27 deadline that I argued was the real deal may go away quietly. Some kind of appropriations bill will pass before then, in all likelihood. And the Pentagon seems likely to get the flexibility and additional funds it needs to avoid some of the damage expected from sequester. That has not prevented the "doomsday drumbeat" from continuing at DOD, with sequester threatening everything from readiness to the Asian pivot, to nuclear strategy, to band concerts. But some politics die hard.

Gee, have we entered an era of peace and budgetary harmony? Not likely. Paul Ryan's budget resolution for FY 2014 is coming next week; a Senate version from Patty Murray will follow. They will differ. And the Obama administration will send up its budget someday -- rumor has it either March 25 or April 8. And "Debt Ceiling: The Second Sequel" will hit theaters this summer. Lots of targets if anybody wants to continue to fight.

It has been said that the definition of insanity is continuing to do the same failing thing, hoping the outcome will be different the next time. A good part of the U.S. defense industry is clearly stuck in this pattern.

CQ/Roll Call ran a piece over the weekend that lays bare the time warp some contractors and their trade associations are stuck in.

The headline talks about how the industry is facing its "moment of truth." The content makes it clear that the industry, and its spokesperson, the Aerospace Industry Association, is far, far from facing the truth about the defense budget.

If this piece is any indication, the industry continues to live in a hermetically sealed box, telling itself its own dream-like stories, and expecting to be "saved" by actors on the Hill who are in the box with them.

The reality is that sequester is now underway, not because the industry lobbying campaign failed in some technical way, as some in the industry seem to think. Millions of dollars ($27 million in campaign contributions alone), numerous road shows (McCain, Graham, and Ayotte visit carefully pre-selected friendly audiences), thousands of interviews (will Buck McKeon ever sit down?), factory-floor lobbying, visits to the Hill -- they were all done to a fare-thee-well. These are tried and true lobbying techniques, which I described at length in my 1980 study, The Iron Triangle.

But the techniques only work if the message is in tune with the voters at large and the majority of the members of Congress. The industry's problem is not technical, it is the failure to recognize we are in a defense drawdown. The budgetary party is over.

Defense budgets rise and fall in response to changing international and political conditions. And those have changed dramatically: The end of the war in Iraq and the coming end of the war in Afghanistan lower significantly the level of public and congressional attention and concern about national security.

And some in the industry seem not to have noticed that we are in a major budget battle, and have been for two years. It is a much bigger battle than the one over the defense budget; that smaller fight is a side show. And as long as some Democrats do not want to change entitlements and Republicans do not want to put tax expenditures on the table, the drive-by budgetary victim of that battle is discretionary spending.

Last time I looked, defense was about 55 percent of discretionary spending, and the third largest cause of the U.S. debt more than doubling since 2001. Of course it is on the table; does the industry still think it is going to get a pass?

The days of ever upwards on defense are over. Sequester or not, defense budgets are going down and sequester just accelerates the pace. The industry should be prepared for the projected defense budgets over the next 10 years to fall at least 20 percent in constant dollars, or roughly a trillion dollars from the current forecast of more than $5 trillion.

When the industry still tries to argue that Leon Panetta "cut" defense $487 billion over 10 years, when all he did was flatten the projected growth in defense, leaving it to grow with inflation, they are not being realistic.

When they think Rep. Harold Rogers, the appropriations chair in the House, is going to save their bacon by giving DOD flexibility on sequester, when that will never survive the Senate, they are not being realistic.

When they think just a little more money to the Aerospace Industries Association to fund more misleading studies about the jobs impact of sequester will be adequate to turn the public around, they are not being realistic.

The realistic companies have been coping for two years: attrition and layoffs, buying in capacity they used to contract out, selling divisions that are less strong in a declining market -- they know what to do. The rest of the industry seems to be howling into the wind.

As we step onto the stage for the next act of the budgetary drama, things seem to make less and less sense. The budgetary solution shimmers on the road ahead, then evaporates as members of Congress repeatedly present legislation that either cannot pass or will not meet the needs of the other chamber.

Only the world of theater can provide the metaphors that describe where we are.

For the last two years I have been describing the budgetary point and counterpoint, the moments of high drama and unresolved outcomes, as an Indonesian shadow play. The budgetary players are actors manipulating two dimensional puppets, backlit through a white sheet. To the audience, the puppets seem real, the actions seem productive, but in the end it is a show.

Today, we have graduated from the shadow play and have entered a more surreal, or even nihilistic drama.

Might we be in a Pirandellian world, where six players (Boehner, Pelosi, Reid, McConnell, the president, and his veep) desperately try to figure out what the script is, what their roles are, and search for a playwright who can get them off the stage.

Or are we in the Sartrean world of No Exit, where nobody can get out of the room and the players all look smaller and smaller in each others' eyes?

Perhaps it is a Beckettian universe, an apparent Endgame which does not end, but is a series of meaningless interactions that end where they started, but actually went nowhere.

Or even the more nihilistic world of Macbeth, where the characters have become poor players who strut and fret their hour upon the stage and then are heard no more. Players who have been weaving a horror story in the sky that is, in the end, a "tale told by an idiot, full of sound and fury. Signifying nothing."

As John Boehner refuses to talk, the president shouts into the Learian wind about the storm to come, and senatorial fingers point at each other, we are, perhaps watching the surrealistic world described by Ionesco in the Bald Soprano. We can only exclaim, as his players do: "How curious! How bizarre, and what a coincidence."

How interesting to watch; how little to behold; how invisible the outcome. Only dramatists could improve on this "reality."