The International Herald Tribune today tackled the issue of privatizing the war in Iraq.
It's one thing for the U.S. military to outsource food and laundry services to private firms, as it started doing aggressively in the 1990s, but it's quite another to outsource the actual fighting. (...) Increasingly relying on these loosely accountable contractors is bound to backfire. As the United States prepares to hand the sovereignty of Iraq back to its people, the fact that the Iraqi army and police force are now being trained by a private company risks sending the message that loyalty is owed not to one's country, but to whoever gets the contract. It is difficult to coordinate the dozen or so private firms in Iraq, and there is little regulation of their training and recruitment.
There is a nice blog about this topic maintainted by Kathryn Cramer