As the US completes its military withdrawal from Iraq, the Obama Administration's stated policy goals are to promote security, stability and prosperity in Iraq, help it emerge as a force for stability and moderation in the region, transition responsibility for security to the Iraqis and cultivate an enduring relationship with Iraq based on mutual interests and respect. However, almost all of these goals are complicated by the fact that around 3.5 million Iraqis are still displaced, around 2 million internally and the rest in neighboring countries. The US has recognized that the displacement of Iraqis has a direct impact on its goals in Iraq, but, as this study demonstrates, its response to the displacement problem suggests that it has either not grasped, or is unwilling to acknowledge, the scale of the problem. This response has been determined primarily by politics and security concerns, and while the US has helped provide much needed humanitarian relief to displaced Iraqis, it has treated their displacement as a purely humanitarian problem while neglecting its other aspects. An overemphasis on the humanitarian aspects of displacement has prevented the US from developing a more comprehensive response that could both help it achieve its goals in Iraq and add to the likelihood that Iraq will eventually emerge as a prosperous stable democracy.