"on the other-hand Germany and Japan are completely independent and have become incredibly prosperous. Could the US just install a puppet leader in Iraq? "
You are failing to consider Arab pride, and the fact that the Iraqi people were not morally defeated like Germany and Japan in the wake of WW2: In Arab eyes, they do not deserve to have their society re-ordered by Westerners in a matter remotely similar to the occupations of Germany or Japan. From their perspective, the Iraqi people, and the Arab world, did not pick this fight with America through terrorism. On the contrary, the terrorism and civil instability is an unfortunate direct result of unfairness, corporate colonialism, corruption, and the resultant class and cultural warfare, that was not of the common people's doing.
Instead of playing benificent, God-given overlord, from the Arab perspective, the USA is expanding collective punishment just like Israel has been, and if the Arab world accedes to it, it will be equivalent to political, cultural, and in some cases even religious bondage and shame, a fate worse than death. We are speaking of conflicts and puppet governments that deeply insult Arab sentiments (identical to what American sentiments would be in a role reversal) in which there will be no quarter and no surrender if pushed far enough. These powerful sentiments can unflinchingly participate, hand in glove with mourning and despair, and devour tens of thousands of lives year in and year out, for however many generations it might require for the outsiders to clearly understand that "Don't Tread on Me" is not an exclusive American franchise. No armies will come out to meet American ones on the battlefield. Instead, they will fight us improvizationally and ruthlessly, without formal heirarchies, from their own doorsteps, and indefinitely.
"It's possible that, if left alone today, iraq could stave off civil war but the cost would certainly be another dictator or the rise of whatever warlord is most powerful at the moment. Is that better? "
Iraq as formerly defined is no longer viable. But a new strongman on America's payroll? Impossible: This intervention has set the tone- In this sea of instability we are creating, the one thing that will coalesce most prominently is intense anti-Americanism, and America will be the loser for it. Of course Arabs are intelligent people, and many, as individuals, will still like many things and people American, but the collective behavior is going to shift suddenly and dramatically thumbs-down for Uncle Sam. As a result, the first popular (but not likely democratic) new governments after the breakup and shakedown of Iraq and Arabia will be as anti-American as was Iran just after the Shah. As this realization dawns, if America squeezes tighter, then more influence will more rapidly slip through our fingers, and there will be a sea change, as an entire region tells the mighty USA "You suck. Go away". The economic implications of this rejection will be profound, and difficult for Americans to accept gracefully. Arabs and Islamist revolutionaries understand this, and know that their resistance will be strong and that their prosperity can be easily restored with new markets for oil, even as America's economy turns panicked and hobbled. Check, and Checkmate, to the New American Century as the Busheviks envisioned it.
Now, Americans need to wake up, swallow our pride, turn to other more profitable ventures, and abandon reckless obsessions at the urgings of oil barons, religious fundamentalists, and zionists. We must stop this dysfunctional meddling, that is not only causing our rejection, but is inflaming reactionism and fundamentalism at the dire expense of cooperation, democracy, secularism, and our own freedom and prosperity. We don't need this pissing contest.
Mod note: seriously you got to stop deleting your post like that!