Before the news of Hosni Mubarak’s impending death dominated the news cycle, the real issue on Egypt is what happened in the past week. On Thursday, Egypt’s Supreme Constitutional Court effectively dissolved parliament. On Sunday, Egypt’s Supreme Council of the Armed Forces issued a supplementary constitutional declaration that stripped the presidency of most of its power and gave itself temporary legislative authority and a strong hand in writing the country’s new constitution. Egypt’s democracy now hangs by a thread after what amounts to a de facto coup. U.S. policymakers ought to reassess Washington’s aims with Cairo and weigh the supposed value of American military and economic aid against the outcomes actually reached. Evidence suggests that U.S. aid can and should be phased out, providing Egypt the domestic political shake-up its young democracy desperately needs.

U.S. officials must consider the precise purpose of military aid programs, particularly their usefulness with respect to Egyptian-Israeli peace. Proponents of aid stand the region's geopolitics on its head, arguing that aid dissuades Egypt’s military from initiating war against Israel. Little to no attention is paid to the fact that Washington advances interests that Egypt already has, as war with Israel would be disastrous for Egypt, aid or no.

Throughout the Cold War, Egypt and Israel fought a war nearly every decade: 1948-49, 1956, 1967, 1969, and 1973. Egypt’s military realized long ago—and more importantly, on its own accord—the hazards of its perpetual confrontation with Israel. Its adherence to the U.S.-brokered Camp David Peace Agreement of September 1978 was the culmination of lessons learned from its devastating military defeats.

Egyptian-Israeli peace is assured not by Washington’s largesse to Cairo, but by the memory of its humiliating military losses and the desperate economic conditions in Egypt. Nevertheless, Cairo continues to wage covert measures against Israel—again, despite receiving U.S. assistance. Earlier this year, pro-military fliers distributed in Egyptian taxis blamed the United States, Israel, and other foreign powers for causing the country’s crisis. In addition, under Mubarak, Israeli authorities complained that Egypt was failing to effectively control the smuggling of arms and explosives in tunnels under Egypt’s Rafah border crossing with Gaza. Other material was also being transferred by sea and above ground by smugglers with the complicity of Egyptian soldiers and officers. Israeli Security Agency director Yuval Diskin believed that Egyptian leaders lacked the will to crack down on these weapons networks because they viewed Israel as a safety valve that channeled extremists away from Egypt.

Recent tensions in the Sinai could have serious implications. As Amman-based journalist Osama Al Sharif writes:

Sinai will remain a critical point of friction between Israel and Egypt. Since the collapse of the Libyan regime, huge caches of weapons have found their way from Libya into the Sinai Peninsula. For Israel, the fact that Hamas has now access to new armaments represents a huge security challenge. It is a situation that neither Israel nor Egypt can control. The former may decide to carry out a preemptive strike against Hamas and loyal cells deep within Sinai. Such unilateral action could easily develop into a regional conflict. [Emphasis added.]

Even if structural factors between Israel and Egypt do not change, and Israel retains its overwhelming military superiority, the potential for overreaction or miscalculation could spiral into conflict. Such a scenario would put U.S. officials in an embarrassing position, having supplied massive amounts of military hardware and economic assistance to both belligerents for over three decades.

Presently, Washington supports a regime in Cairo that continues to view Israel as an enemy and entrenches its power through brutality and political repression. Until recently, Cairo’s Islamist government was intent on incorporating Sharia law and cooperating (for more U.S. aid) with America. Moreover, many Egyptians—angered by lack of progress on Palestinian self-determination through the creation of an autonomous Palestinian state—are increasingly frustrated with an America that sends massive military and financial assistance to their regime (over $60 billion in military grants and economic assistance since 1975).

Decades of U.S. aid has done nothing to turn Egypt into a democracy or a market economy. Unfortunately, as made clear by the transfer of power in February 2011 from former president, Hosni Mubarak, to the Supreme Council of the Armed Forces (SCAF), Egypt has not undergone a revolution, but rather a thinly veiled attempt by the armed forces to perpetuate their six decades in power.

Months ago, the Obama administration resumed funding to Egypt, even though Congress restricted military aid until and unless the State Department could certify that Egypt progressed toward democracy, basic freedoms, and human rights. A senior Obama administration official said at the time that there would be no way to certify that all conditions were being met. Today, however, with thousands of activists being detained and tried in military courts, overwhelming evidence shows that Egypt’s military junta has not met any of the aforementioned obligations. The military, which commands an array of commercial enterprises in industries such as water, olive oil, cement, construction, hospitality, and gasoline, limited democracy to advance their narrow self-interests.

In Cairo, a freely elected civilian government will always be powerless against a deeply entrenched military. The flourishing of a secular-minded liberal democracy would of course be ideal, but guided by the belief that picking sides in the Arab world advances U.S. strategic interests, senior officials endorse a policy that in the short-term could stymie Islamists, but in the long-run discredit reformers and increase the credibility of extremist hardliners. That central paradox plagued America’s counterterrorism policy under Mubarak. As an unclassified U.S. Department of Defense report from 2004 acknowledged:

If it is one overarching goal they [Muslims] share, it is the overthrow of what Islamists call ‘apostate’ regimes: the tyrannies of Egypt, Saudi Arabia, Pakistan, Jordan and the Gulf States…Without the U.S. these regimes could not survive. [Emphasis added.]

Here, however, a caveat is needed. The Muslim world is expansive, and radicals are only a small part. As Thomas H. Kean, chair of the 9/11 Commission, said in July 2004 before the U.S. Subcommittee on National Security:

The small number of Muslims who are committed to Osama bin Laden’s version of Islam, we can’t dissuade them. We’ve got to jail them or we’ve got to kill them. That’s the bottom line. But, the large majority of Arabs and Muslims are opposed to violence, and with those people, we must encourage reform, freedom, democracy and perhaps, above everything else, opportunity. [Emphasis added.]

Even as many in Washington—including this author—strongly reject the Islamists who rose to power in Cairo, it is well past time for us to step back and allow Egyptians to shape their own destiny. Egypt is deterred from attacking Israel not because of U.S. aid or love of the Jewish state, but rather because it has little prospect of gain and much to lose. If tensions erupt in the Sinai and spiral into war, that development would perhaps serve as the greatest indictment against the assumption that decades of U.S. assistance produced a sustainable peace.

Egyptians must judge for themselves whether Islamists or the military can deliver on promises of economic and political reform, especially after decades of substantial U.S. assistance has failed to live up to its aims. Sadly, it seems that given the conventional wisdom in Washington, phasing out U.S. aid to Egypt might be more difficult than phasing out Egypt’s old dictator.