I haven't read the book, or have no context, but am guessing foreshadowing. Foreshadowing is when you predict a future event.
The true meaning of the word "benign" in this sentence is - harmless. It is the word that originates from Latin word "benignus". In medical terms, it refers to something that does not cause death or serious injury. Also, it is most commonly used to describe tumors which are not cancerous. The famous American film director once said: "The most beautiful words in English are not 'I love you' but 'It-s benign'." This word can also be used to describe one's character, meaning that he or she is kind, gentle and that can hardly harm anyone.
I’m assuming a country spending more money even though they are aware of how much debt they have (?)
In Tim O'Briens chapter good form, the narrator says he wants his readers to feel WHAT HE FELT.
Even though I haven't read the whole story, I think he is using the first person point of view in telling his story. This is because in using the first person point of view, readers will be able to put themselves in the narrator's shoes and experience what is happening in the story.