What to Do About Pakistan With an "ally" in a state of perpetual dysfunction, it's time for Washington to reconsider its options: containment or benign neglect. The last year and a half has been a rocky road for U.S.-Pakistan relations -- and once again, domestic and foreign policy developments seem ever more perilous. The year 2011 opened with the cold-blooded assassination of the governor of Punjab, Salman Taseer, by a fanatic who denounced him as a blasphemer. Americans watched aghast as Pakistan's elite failed to defend Taseer, while many Pakistanis praised the assassin. Shortly thereafter, U.S.-Pakistan relations convulsed when two ISI ruffians confronted a CIA contractor, Raymond Davis. Davis shot the men dead. No sooner had the two "allies" managed to weather that crisis than the United States conducted a unilateral raid to kill Osama bin Laden, who was ensconced in the cantonment town of Abbottabad, near Pakistan's acclaimed military academy. Before relations could thaw, an accidental raid on Pakistani troops at the Salala checkpost in November killed 24. The United States steadfastly refused to apologize publicly. Pakistan retaliated by shutting down all ground supply routes into Afghanistan. And this is where we find ourselves today. As Americans confront an increasingly contracting set of options to engage Pakistan, Islamabad has offered yet another twist to the ongoing policy dilemma in Washington. Just this week, Pakistan's erratic and ever-activist Supreme Court ruled that Yousaf Raza Gilani is no longer qualified to remain prime minister. Then on Thursday, another court issued an arrest warrant for Makhdoom Shahabuddin, who was President Asif Ali Zardari's first choice to replace the ousted Gilani. And just for good measure, the court also issued a warrant for Gilani's son. If Pakistan's civilian government wasn't fully dysfunctional, rest assured: it now is. Unfortunately, ensuring the stability of this civilian government has been a policy goal of the United States since the return to democracy in February 2008. By any measure, Pakistan has squandered the last decade. The events of 9/11 afforded the country a rare opportunity to regain its international standing after having teetered for years on the brink of pariah state status. Pakistan had become renowned for spreading nuclear technology to such states as Iran and North Korea; reckless adventurism in India; insistence on supporting jihadist groups as a principal tool of statecraft; and steadfast refusal to adopt policies that might invest in its people rather than entrench the military's deep state. Had Pakistan chosen to jettison its jihad habit, sought assistance in rehabilitating tens of thousands of militants and their supporters in Pakistan, and found some amicable resolution to its longstanding dispute with India, it would still enjoy the support of the West, as well as their collective checkbooks, today. Those years have gone. Pakistan is in crisis. Its courts act on whim rather than jurisprudence. Its political parties are vast pools of corrupt patronage networks that aggregate elite interests while disregarding the interests of Pakistan's struggling masses. Neither elected politicians nor military rulers have had the political courage to right the nation's fiscal woes by enforcing income tax or imposing industrial and agricultural taxes on the ruling elites and their networks of influence. While the army has retrenched from a direct role in politics, it has done so likely because it has no other option: Pakistan's military suffered a mighty humiliation after the bin Laden raid, which left many citizens wondering whether their country is a failed state, a rogue state, or both. Not surprisingly, the United States is frustrated. Many in the Washington have told me that "we are â€˜this close' to bombing them," yet the Pakistanis continue to somnambulate in the dream of their country's own importance. U.S. Secretary of Defense Leon Panetta may have jolted some out of their slumber with his recent comments in Delhi and Kabul. Not only did he say in clarion words that Washington is exhausted with Pakistan's various ruses, but he also addressed forthrightly the simple fact that Pakistan has taken billions of U.S. dollars to assist the war on terrorism while continuing to support the very elements killing our troops. In case Pakistan missed the reference, Panetta made clear that "anybody who attacks U.S. soldiers is our enemy. We are not going to take it." Ironically, 11 years later Pakistan seems a whole lot more dangerous than it was on Sept. 10, 2001. Elements of Pakistan's erstwhile jihadi proxies (notably Jaish-e-Mohammed and Harkat-ul-Jihad-e-Islami, among others) have refocused their efforts to sustain a bloody war on Pakistan itself. These groups have long targeted Pakistan's Ahmadiyya, Shia, Christian, and Hindu minorities. In recent years, they have turned their guns, grenades, and suicide vests against the majority of Pakistanis: Sufis who worship at shrines. Not only have many Pakistanis blamed "outside" elements for these crimes, but many have also even rallied about these killers. Most notably, the killer of Salman Taseer was garlanded by supporters. The judge who sentenced Taseer's killer -- who proudly confessed his guilt -- had to flee the country after receiving death threats. Such disturbing mobilization should give pause to those who champion the causes of the "silent moderate majority" in Pakistan. Equally disconcerting, Pakistan has long refused international access to its chief nuclear black marketer, Abdul Qadeer Khan. Worse, the state and its citizenry have paraded him about the country like a super hero the nation desperately wants. Pakistan has a Nobel laureate (Abdus Salam, Physics, 1979), but he is not embraced because he is a member of the much-loathed minority Ahmadiyya community. Pakistan understands full well that it is these nuclear fears that ensure that the United States will not easily walk away from Pakistan. In recent years, Pakistan has focused its resources on fissile material production and the assembly of tactical nuclear weapons -- including nuclear artillery. Pakistan sees its nuclear program as its insurance against a catastrophic showdown with the United States. Despite Washington's increasing demands that Pakistan disassemble its terrorism infrastructure, Islamabad has consistently chosen the most unproductive paths. Rather than shutting down the various Islamist terror groups operating from Pakistan's soil with varying degrees of explicit and implicit state support, it has pushed jihadi leaders such as Lashkar-e-Taiba to the forefront of the recent political gathering of rogues, the Difa-e-Pakistan Council (DPC or "Defense of Pakistan Council"). The DPC is festooned with jihadi leaders, as well as former military and intelligence personas known as jihadi apologists. The DPC, of course, is then used by the military and intelligence agencies as a foil to efforts by the political parties to renormalize relations with the United States and seek political and economic rapprochement with India. Those in Washington who steadfastly believed that, with enough patience and assistance, Pakistan could slowly be transformed into a responsible partner for some modicum of stability in South Asia have been chagrined by a sorry trail of persistent perfidy. Even those who believe that the intelligence, military, and/or political leadership had no knowledge of bin Laden's sprawling den in Abbottabad near Pakistan's Military Academy, cannot help but be dismayed by the choices the country has made since his death in May 2011. While Pakistan's arrest of the physician Dr. Shakil Afridi, who helped identity and eliminate bin Laden for the time-tested crime of espionage, what is abhorrent is that he is the only one who has been arrested. Even if one accepts (for the purpose of argument) that Afridi committed espionage, what explains the lack of any investigation, much less prosecution, of the landlord of bin Laden's compound? Why has there been no investigation into who actually facilitated his sanctuary in Pakistan and his extensive travels with his terror entourage? Who are the various physicians that attended to the deliveries of his numerous children, birthed by his numerous wives with him in the compound? Pakistan has made it crystal clear that it has no interest in identifying -- much less punishing -- those who aided and abetted bin Laden. Recently, the Pakistani Taliban have ceased polio vaccinations until the U.S. drone program is called off. Of course, the reality is that many of Pakistan's ostensible clergy have long denounced such vaccinations as a Western plot to reduce Muslim fecundity. Thus, it is not clear what the marginal impact of this recent chicanery will be on Pakistan's polio crisis. Pakistan is one of the few countries on the planet with endemic polio infections. At long last, it seems, various agencies of the United States government have come to the conclusion that Pakistan cannot be changed. Islamabad's behavior in the region will remain staunchly pegged to its antipathy toward New Delhi. It will pursue policies that threaten the integrity of the Pakistani state for no other reason but the chimerical objective of resisting the obvious rise of India, while clinging to the delusion that it is India's peer competitor -- despite obvious and ever-growing disparities. Finally, Americans are asking what Pakistanis have long concluded: How can the United States and Pakistan have any kind of positive relationship when our strategic interests not only diverge but violently clash? * * * For once there's consensus in Washington. Currently, the U.S. Department of Defense, Central Intelligence Agency, vast swathes of the State Department, both houses of the Congress, and the White House have all joined in chorus to decry Pakistan's duplicity. While acknowledging Pakistan's dangerous policies and their implications, and holding Pakistan to account for the same, the United States needs to resist the most basal urges simply to "cut off" Pakistan. Such a move would ultimately be counterproductive. The United States should continue to engage Pakistan where possible. The United States has no doubt learned that there is little it can do to bolster domestic stability in Pakistan. As the most recent governance crisis unfolds, there are few in Washington who harbor any belief that the United States can still help transform Pakistan. There is an increasing acknowledgement that the United States must engage the Pakistan that is rather than the Pakistan that is desired. This means that embassies and consulates should continue to function without retrenchment. Pakistan cannot be left alone to become an Iran or North Korea -- which remain opaque to U.S. diplomatic, military, and intelligence agencies. Military exchanges should continue, as should security training missions, as long as there is Pakistani demand for the same. The United States should continue some degree of human development with modest rather than transformative goals. The United States should deepen educational ties, especially with younger cohorts of Pakistanis who face a dismal future in economically shambolic Pakistan. However, future strategic assistance, such as the sale of F-16 fighter jets, would be misguided. After all, the founding logic of "strategic military sales" is beguiled by the simple fact that our strategic aims clash. Rather than pursuing some fantasy of a "strategic relations," these forms of assistance should be transactional and contingent on actual -- rather than hoped for -- performance. The United States should be willing to provide weapons systems and training that enhance Pakistan's capabilities to contend with its internal security crises rather than those that encourage it to resist the inevitable military dominance of India. While the United States -- amid political outrage at Pakistan's ongoing perfidy and deepening fiscal austerity -- should continue to engage Pakistan where possible, there are larger issues Washington must confront now. If it cannot persuade Pakistan to abandon the most noxious policies of jihad and nuclear proliferation, then it must quickly embrace the realities of managing those problems in the most effective manner possible. There are at least two approaches that should be considered -- neither of which negates the fundamental need to remain engaged at whatever level is possible and sustainable. And neither is fundamentally at odds with the other. The first notion that is gaining momentum is the notion of containment. Proponents of some version of containment debate the contents and lineaments of this policy. If containing the country is not possible, containing the threat may be more feasible. This includes increasing pressure on Pakistani intelligence, military, and other personalities for which there is intelligence showing they enable nuclear proliferation or terrorism. It is important to sanction specific persons rather than agencies generally. Such pressure could include visa denial (which the Pakistanis routinely do to their foes and critics), working with international entities to restrict finances outside of the country, or working with Interpol to have them arrested when they leave Pakistan. A second -- and indeed complimentary -- strategic option is for the United States to withdraw itself as an arbiter in the region and hold Pakistan fully responsible for acts of omission and commission tied to its twinned policy of nuclear proliferation and jihad. This may be best described as "benign neglect." A policy of benign neglect could undermine the two pillars of Pakistan's nuclear jihad strategy. First, by increasing fissile materials and expanding tactical nuclear weapon production, Pakistan aims to increase the possible cost to India for any punitive action. Second, it seeks to pull in the United States to restrain India from action. These two facets taken together reduce any cost that Pakistan has paid for its nuclear jihad strategy. The United States should clearly tell Islamabad -- publicly and privately -- that it has no intention of playing this mediating role in the future. In any event, the U.S. record in solving the Indo-Pakistan dispute is abysmal at best and humiliating at worst. Making clear that Washington will no longer even attempt to try to play this role will dramatically force Pakistan to rethink the cost-benefit calculus of using militant groups such as Lashkar-e-Taiba as instruments of foreign policy. The United States should also consider the value of a simple statement of the obvious: For all intents and purposes, the contested Line of Control that divides Indian- and Pakistan-administered portions of Kashmir is the border. In doing so, Washington would make clear to Pakistan that Kashmir is an internal affair to be resolved by New Delhi and Srinagar. This position should be reflected in U.S. maps and other official documents, which would deprive the Pakistanis of the ability to credibly claim to have any equities in the "Kashmir issue." While there are genuine governance problems in Indian-administered Kashmir, none of these problems functionally concern Pakistan. Pakistan's militant groups and the countermeasures they have induced have plunged the province into an industrial recession that will take decades to recover from. Meanwhile, Kashmiris have paid the price for Pakistan's policies -- while those Pakistanis who oversaw the campaign of jihad enjoy a life of comfort and ease at home. As a part of the benign neglect approach, the United States also should be willing to consider letting Pakistan fail economically by not coercing the International Monetary Fund to bail out the country unless it meets its own commitments to fiscal reforms. While many Pakistanis will no doubt see this as an unfair punitive measure, it is a near certitude that Islamabad will never make the necessary reforms to expand its tax revenues as long as it can use its inherent instability to extort ongoing assistance from bilateral and multilateral donors and agencies. This is the essence of moral hazard. Finally, the United States should work to undermine Pakistan's continued effort to use its expanding nuclear program to extract assistance from the international community. Since 9/11, Pakistan has increased fissile material production and expanded its arsenal of tactical nuclear weapons. Meanwhile, Pakistan's vast jihadi landscape further conjures the image of Islamist barbarians banging at the nuclear gate. The United States has spent considerable effort and resources to manage this problem to the best extent possible. These efforts may well be counterproductive. First, with respect to undesirable proliferation, Pakistan and the United States share incentives. After all, if the jihadis can penetrate the program, so can Indian, U.S., or even Israeli intelligence agencies. Thus, there is a natural incentive for Pakistan to seek and obtain assistance. Still, the United States should actively seek to neutralize Pakistan's susceptibility to allowing nuclear weapons to fall into the hands of dangerous non-state actors. It can do so by devising a declaratory policy that requires Pakistan to behave as the sovereign state it claims to be. Namely, if Pakistani assets are used in a state or non-sponsored incident, Islamabad will be held responsible. Can Islamabad's security managers fault the United States for insisting that it bear the consequences of such much-lauded sovereignty? While some may view these offerings as unreasonable, reckless, dangerous, and irresponsible, it is equally fair to ask whether Washington's decades of policies toward Pakistan have been unreasonable, dangerous, and irresponsible? Moreover, what good have they accomplished? While many policymakers and analysts are willing to bank everything on the gamble that Pakistan is too dangerous to fail, we should be willing to consider what failure would mean and the inherent costd snf benefits of this happening. After all, when the Soviet Union fell, none of the worst fears materialized. And Pakistan is hardly the Soviet Union.