The Government Accountability office just reported that US taxpayer-funded reconstruction efforts in Iraq are failing. Oil and electricity production have fallen below pre-war levels, and water, sanitation, and healthcare efforts are poorly managed and are having no significant effect on the lives of Iraqis.
One really interesting bit in the report admonishes the State Department for failing to track progress on water sanitation,
Though the State Department claimed that 64 projects were complete, GAO reported that "State was unable to provide a list of those completed projects." [Did they lie? How did they come up with that number? - AP]
GAO also found that the Administration's methods for tracking progress in this sector "do not show how the U.S. program is affecting the Iraqi people" because they do not "measure increased access to clean water and improved sanitation in Iraq."
Far more than incompetence and questionable claims of success, the big problem is security. Billions in funding have been shifted away from reconstruction efforts to hire private security services. No doubt that's helped keep the body count down, but they haven't stopped insurgents from targeting infrastructure.