Great chart from Deutsche Bank showing a times series of U.S. Federal spending. Note the “peace dividend” and decline in defense spending during the 1990’s, which was partially responsible for the Clinton surpluses. The chart also illustrates where the reform and cuts need to come — entitlements and heath care. Third rail.
What also stands out is the interest on the debt component, which currently, as a % of GDP, is less than half of what it was in the 1990’s, even though the stock of national debt has exploded. The Power of Zero (interest rates).
(click here if chart is not observable)
Global Macro Monitor 
Entitlements don’t need to be cut; they need to be put on a sound fiscal basis. This will entail revenue increases. If this seems impossible or counterproductive, look at Europe and, especially, Germany. Germany is a success story.