In summary: WWII and the Cold War are over; the European Union and economic powerhouses Japan and Korea do not need to be defended mostly by the world's largest debtor.
Return all maneuver forces from overseas, starting with Europe, then Korea, and then Japan. Retain a few Joint/Combined training and logistics facilities. Build and maintain an expeditionary mindset based on our geographic location, global realities, and economic necessity. A bit of the speak softly but carry a big stick approach - without the Imperial decorations. Domestic Base, Global Reach.
Reduce the standing Army and focus on the Army Reserve and National Guard with realistic plans for activation as needed (the way this nation was founded and acted most of its existence, natch).
Over at WaPo, Robert Kaplan makes the argument in an almost airtight manner.
Then there is America's military power. Armies win wars, but in an age when the theater of conflict is global, navies and air forces are more accurate registers of national might. (Any attack on Iran, for example, would be a sea and air campaign.) The U.S. Navy has gone from nearly 600 warships in the Reagan era to fewer than 300 today, while the navies of China and India grow apace. Such trends will accelerate with the defense cuts that are surely coming in order to rescue America from its fiscal crisis. The United States still dominates the seas and the air and will do so for years ahead, but the distance between it and other nations is narrowing.
Terrorist acts, ethnic atrocities, the yearning after horrible weaponry and the disclosure of secret cables are the work of individuals who cannot escape their own moral responsibility. But the headlines of our era are written in a specific context - that of one deceased empire that used to be the world's preeminent land power and of another, the world's preeminent sea power, that finds itself less able to affect events than ever before, even as it is less sure than ever of the cause toward which it struggles.
This is no indictment of President Obama's foreign policy. There is slim evidence of a credible alternative to his actions on North Korea, Iran and Iraq, while a feisty debate goes on over the proper course in Afghanistan. But there is simply no doubt that the post-imperial order we inhabit allows for greater disruptions than the Cold War ever permitted.
Husbanding our power in an effort to slow America's decline in a post-Iraq and post-Afghanistan world would mean avoiding debilitating land entanglements and focusing instead on being more of an offshore balancer: that is, lurking with our air and sea forces over the horizon, intervening only when outrages are committed that unquestionably threaten our allies and world order in general. While this may be in America's interest, the very signaling of such an aloof intention may encourage regional bullies, given that rogue regimes are the organizing principles for some pivotal parts of the world.