For John, BLUF: Defense Budgets are going down, but we still have far flung responsibilities.
Whether the US Congress fixes Sequestration and the Fiscal Cliff or it doesn't, there are going to have to be changes in our "Defense Posture". That is to say, we are going to have to do some cutting back. We can not sustain our current national security budget, consisting of the Department of State, Department of Defense and Department of Energy (Nuclear Weapons). Here is a breakout from four years ago, which comes to almost $800 billion, including a number of Budget Functions that contribute to national security.♠
For those who wish to return to "splendid isolation", as a way to save money, I suggest you refer to this publication from RAND, figure 4.2, page 23. The pamphlet is titled U.S. Global Defense Posture, 1783–2011. The figure is titled "Continental and Commercial Posture, 1815–1898" and it depicts US Naval Squadron deployments over the period cited.
It costs nothing to download this RAND Monograph.
This Federal Budget situation offers up no easy solutions.
That said, we are going to see a reduction in spending on national defense and that will result in people being discharged from military service and a reduction in contracts let, meaning people working for contractors being laid off. If the economy rebounds, no problem.
Regards — Cliff
♠ Mother Jones would make it $1.2 Trillion, by adding in Homeland Security, the Department of Veterans Affairs and Interest on borrowing apportioned to national security.