Short version: Iraq is a failed state, that will never recover to be a unified, vibrant democracy, nor a beacon to the arab world. The sectarian divides unleashed by Bush have taken root, and will not be dislodged. As for american policy, the surge was a temporary band-aid that fundamentally accomplished nothing in the realm of political reconcilation. Long term, it has actually made things worse. The US policy of bribing, and paying sunni insurgents to not attack us will backfire. We are, in effect, arming "former" sunni insurgents and giving them piles of cash. All of which they will ultimately use to further their own agendas. Which is to prevent Shia domination of Iraq. We basically abandoned southern Iraq to Muqtada Al Sadr and the Mehdi Army. Which means, Bush effectively created another theocratic Hezbollah-style political organization in shia southern Iraq. Sectarian violence between shia rivals - specifically the Mehdi Army and the Supreme Islamic Council's Badr corps - will likley grow and get worse. One thing that's held violence partially in check for the last 6 months, is Muqtada Al Sadr declared a unilateral cease fire. And he will only hold to that cease fire in accordance with his own agenda, not Bush's agenda. The kurds have all but bailed out on Iraq. The kurds are splitered and split even among each other, and the coming conflict between the kurds and sunnis over Kirkuk and the northern oil fields is almost a certainty.