On the domestic spending front:
I think you're being too optimistic about the consequences of Bush's spending. The machinery of both parties is oriented towards getting money from lobbyists and doing their bidding (i.e. bribery). As the various scandals with DeLay, Frist, et al. show, the other "conservatives" in the GOP are not about to turn around and put a cap on truly wasteful spending. They may make a few symbolic gouges at the poor, but we will continue to see bridges to nowhere and no-bid contracts. The Democrats may decide that reform is a winning issue, as the GOP did in 1994. If they won, I'd expect things to be clean about the same length of time.

The only thing that will change this is forward-looking fiscal leadership (including a willingness to cut Social Security and Medicare, AND raise taxes), or a severe fiscal crisis, where people seriously talk about the US defaulting on its debt. Guess which one is more likely.