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Should Obama's first step in Iraq be to end private contracts?

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So, as some may know, the Bush administration has chosen to secure many assets in the Iraq war by relying on thuggish companies like Blackwater Worldwide, a group that has its own definition of Rules of Engagement (I.e., gun down the enemy, and the 14 civilians standing next to him). Many American soldiers have also complained that Blackwater's reckless tactics have made their own jobs even more difficult, costing them good will with local communities. Blackwater agents have been involved in everything from weapons smuggling to drinking on duty (resulting in "accidental" fire).

Meanwhile, Blackwater guards make some nice salaries-six figures-for their work. Their operations in Iraq have been limited by Congressional law and they are now subject to a variety of other "checks". But I'd like to see the new administration take things a step further and end reliance on private security contractors completely...or at least in combat zones. Or, is use of private firms and "mercenaries" the new direction in US combat operations? Maybe I'm overlooking some benefits?