Energon,
I disagree with a lot of your assumptions, but there lies the fun in exchanging views!
Did we make bad decisions in supporting the Taliban and the Mujahideen? I would respectfully suggest that the answer is not easy at all in the case of the former. We talked a bit about that on another thread, and I would suggest that geopolitical circumstances essentially tied Pakistan's hands as to what course it would follow. If there is a villain in this story, I would consider him to be Zia-ul-Haq. Not for supporting the Afghan Jihad, which any leader may have done considering the threat, but because of his domestic policies that changed the face of Pakistani society.
As far as the Kashmir Jihad is concerned, I think you are mistaken as to the amount it "cost" the GoP. This was pretty much a war fought dirt cheap. Resources for the Mujahideen were available from donations from Pakistanis, charities etc. - similar to what the Taliban are trying to do. It could also be argued that a lack of flexibility from India's side in discussing options other than the LOC have contributed to the lack of normalcy between the two nations.
The JF17 program is extremely reasonable as far as costs go - in fact the whole idea was because of the need of an "affordable" fighter. I don't see the 250 million spent over ten or so years as making or breaking Pakistan. What did harm us was the insidious corruption and lack of institutional development all those years that retarded our progress. I would also like to point out that Pakistan was not making any major military purchases during the time its economy was stagnant, arms purchases have only recently picked up, and though some articles have suggested that Pakistan was the largest arms purchaser (5 billion or so) I haven't been able to determine how much of that is covered by US funds for the WoT. The only major contract I can think of, that Pakistan is paying out of its own pocket, is the Saab Erieye system (about a billion). So Pakistan has been quite conservative with its military expenditure.
I have commented on the doctrine issue on another thread so I'll refrain from saying to much here, but if you cannot use your nukes to prevent an invasion/attack by a superpower, then what is the point of having a nuclear deterrent?
I'll leave the who initiated which war issue aside, since it will go nowhere. Friedman is entitled to his view as are you and as are most Pakistanis. Finger pointing about who did what first leads no where, as is amply evident from the circus of analysts and intellectuals in the Mid East conflict. What is fact is that there has been violence and war between the two sides from the moment they both gained independence, and there is a lingering, internationally recognized territorial dispute between them. In such a situation it is hard to argue against Pakistan's policy to maintain a credible defensive military, and to supplement its shortfalls in numbers and technology with a lower nuclear threshold. At the end of the day, it is about ensuring the stability and survival of a nation in the face of a "hostile" and numerically and technologically larger enemy.
A strong conventional military does have its advantages, because what if India were to call the nuclear bluff? That essentially puts all your eggs in one very hard to reach basket. A country needs the ability to defend itself by conventional means as well.
Here is a quote from a paper Bushroda provided a link to, that paints a different picture of the events in 2002 - not one of "overwhelming economic concerns" and "responsibility" but of being deterred by the possibility of a protracted conventional conflict, thereby justifying the investment in conventional forces:
Pakistans nuclear weapons are considered to be absolutely essential to deter India from undertaking a wide range of coercive political-military behavior that could undermine Pakistans territorial integrity and political sovereignty. However, it is important to recognize that Pakistani defense planners still consider their conventional armed forces to be the first line of defense against Indian conventional military attack and the backbone of the countrys overall deterrence posture. It could be said that 95 percent of Pakistans strategic deterrent relies on a robust conventional military capability and deliberate and repeated demonstrations of the Pakistan leaderships readiness to employ it decisively if attackedor even seriously threatened with military attack.
Pakistans military conduct during the 2001-2002 crisis with India revealed this orientation. When India mobilized its armed forces for attack shortly after the 13 December 2001 terrorist strike against the Indian Parliament, Pakistan responded by immediately putting its own armed forces on a war footing. Pakistani military leaders were very satisfied that their ground forces were able to reach their designated strike positions more quickly than their opposite numbers, thus eliminating the element of surprise and nullifying any advantage that India might have by striking across the border first. It is widely speculated that Indian Prime Minister Atal Bihari Vajpayee decided against a military attack when his troops had moved into their strike positions by the middle of January because Pakistani troop deployments indicated that Islamabad was well prepared to counter-strike at locations of its choosing, thus eliminating any advantage India would have gained by attacking first.
Nonproliferation Policy Education Center
It would be ideal if we didn't have to maintain a relatively large conventional military, but history cannot be unwritten, and trust will take a long time to build.