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Here's what I know. I don't know if this will help you at all.

Iraq signed a treaty with the Soviet Union, during the Cold War in 1972. The USSR was their primary arms source even before the Iraq/Iran war.

They made a load of money during that time because of the oil crisis. I doubt the revenue went into schools so much as military might. They had Iran next door and the US backing the kurds in the north.

Saddam had already established himself as a "hardline" deputy, and he "assumed" the presidency in 1979, the year after they started killing members of opposition parties. His rivals for the presidency were all murdered within days of his takeover.

Reagan was elected in 1980 (81). The US wasn't supporting Iraq until 1982, when our relationship with Iran had soured thanks to their move to RADICAL ISLAM.

The argument the have is that it's Reagan's fault for supplying SH with weapons in the first place. Any advice?

First of all, you can tell them that it is Carter's fault for getting us into a position where we had to arm Iraq.

Then once they've howled over that for a while, tell them that Hussein, having been given the opportunity to become the foremost power in the Middle East, bring his country into the modern age, and be viewed as Iraq's greatest leader in history, instead tried to forcibly impose the Ba'ath party's Socialist agenda on his people, and then killed anyone who resisted. Tell them that you can understand why, being socialists just like Hussein's Ba'ath party, they try to excuse such murders since as socialists they think they are "the violence necessary to impose Socialism" (a direct quote from Mother Jones magazine). Tell them that while socialists like them see nothing wrong with killing hundreds of thousands or even millions of people in order to force "equality" on them, that most Americans can't stomach it, and so we had to go kick Hussein out, because HE had made the CHOICE to ABUSE the power we had given him.

If their two braincells haven't fried completely and caused them to degenerate into screaming obscenities in true Leftist fashion after you've fed them those arguments one at a time, come back here and reload.