To my delighted surprise, NPR ran an item on Morning Edition today about the effects of the Surge, and the debate in the armed forces over what is happening. If you've listened to Biddle's lecture, it's worth following it up with this. (Alternatively, listen to Biddle after hearing this to get more background.)
The item mentioned a consequence of the US policy that I haven't mentioned, although I think it's possibly overstated here. The effect of paying these gangs is to create a parallel force, the consequences of which are difficult to forecast. One of the few comparable situations I can recall is England after the Hundred Years' War. The result? A civil war.