In other words, it seems likely to me, that unless we control spending, we are likely to see future warfare, which will look a lot like Iraq and Afghanistan, but with way higher casualties, and much less desirable outcomes.
Just a few considered implications (from a non-military political type):

1) Less willingness (for money reasons) for the United States to get involved in foreign 'adventures', regardless of cause. Now I'd bet that the extremes of both parties (isolationist types on the right, and anti-war types on the left) would both be very, very happy with those results, but the problem is likely to be "Never want something so badly, because you just might get it".

For example, if the US military is substantially constrained from it's current 'role' of "Chief Cop" in any number of different locations, you could see any number of regional conflicts brewing up, and the constraints that currently exist in modern day warfare on how the conflicts would unfold would be unlikely to continue (think reverting to Taliban style tactics, only being both considerably more brutal and widespread).

2) More conflicts would be likely to have either a primarily religious, ethnic, or economic survival overtones (Example: conflicts over water). And those types of conflicts tend to get very scary, because a strong part of the intent of the combatants on all sides is to dehumanize the opposition, so few, if any weapons and tactics available to either side would not be utilized. Think Republic of the Congo, only more brutal and with less restraint.

3) Regional conflicts. When it's the small players fighting by themselves, these types of conflicts can and will spread quickly as the neighbors are more likely to choose up sides - particularly if the big guy is going to be sitting it out. This is probably the one I'm the most concerned about - because if the US starts to take an attitude that they are going to sit out these regional conflicts, then we are almost turning over resolution of the conflict to the least stable leadership which is actively involved in the conflicts.

4) Tactics in such conflicts. These types of conflicts aren't going to be rewarding for precision warfare - instead it's likely to be "more terror, all the time". Targets which generate/inflict the most losses, fear, and loathing will be preferred, and also inflict the most pain. It's not going to be strikes against opposition military as instead against much softer civilian and economic targets. And I could see substantial use of CBW in such conflicts, because when each side goes out to dehumanize the opposition, there's a lot fewer restraints against such use of such weaponry.

Obviously, the above is worst case outcome. But warfare could easily slide back to being extremely brutal, with the Iran-Iraq war being typical in terms of losses.