I remember reading somewhere that Iraq's foreign debt at the conclusion of Desert Storm was in the neighborhood of 150-200% of GDP. I'm wondering how much of those old debts are still on the books today?
As for the F-16's, I think it's a good choice for the Iraqi Air Force and for the U.S. It's a capable, relatively inexpensive fighter that gives it the capability to oppose Iran without upsetting the balance of power in the region should things go south between Iraq and her other neighbors in the future.
I remember that some of the Gulf Nations, including Saudi Arabia forgave Iraqs debt. I do not believe in giving advanced technology to a nation that has a shaky government and is warming is relations with Iran and Syria.