Slashing the military budget is not the best idea. I'm not going to argue that it could stand some trimming here and there for the sake of efficiency. I am, however, going to argue that the world needs a police force. If the US suddenly pulls back a lot of that responsibility, then someone else is going to have to pick up the slack. That means if you don't live in the US, expect your military spending to go way up. That or just bow to a new power that will fill the power vacuum. I'm sure you'd love Chinese dominance so much better. Don't even start on that UN thing. Most countries can barely keep themselves running properly, let alone trying to bring everyone together under one banner.
All the problems with the economy and governments are the result of basic human response (they are just made up of people, their interactions, and their ideas). If we cannot compensate for this somehow, all of this will inevitably crop up again. Attack the problem at it's source, don't just cover up the symptoms. The issues closer to the end result or farther away from the root cause that you address is increasingly superficial.
It's not just the leaders' fault for corralling people to their demise, but also the fault of the people for not paying attention or just not caring. There's no compensating for willful ignorance.