I certainly agree that military spending should be dramatically cut. I just don't think it'll ever happen. So with that in mind I would like to see our military personnel re-trained and better utilized. Rather than protecting corporate interests they should be used to help create/maintain infrastructure and provide basic human services - both here and abroad. That I-5 bridge in northern Washington never should have collapsed. Detroit never should have deteriorated. The levees in NO never should have failed. Our soldiers should have been put to work keeping our infrastructure in tip-top shape. And abroad we could be providing clean drinking water, housing, schools, electrical grids, etc to the poorest parts of the world rather than driving around in armored vehicles and heavy artillery. Essentially reduce the fighting force and increase the Corp of Engineers. Rather than training people to kill, train them to build, teach, provide health care, etc (and also to kill as an absolute last resort). Not only would this be a generally decent thing to do, but it would slowly help improve our image internationally.
I also think compulsory service might be a good thing. Two years of service for your country would buy you a free college education and some other perks (extremely low mortgage rate for first home purchase, free health care, etc). But compulsory service should only come after the reorganization of the military, and there should be some level of control as to what sector you're going to serve in (ie, nobody would be forced into the armed forces - though perhaps everyone would receive basic training).
I also think that compulsory service might help reduce the "us vs them" mentality in our own country. Being compulsory it would be made up of all strata of the population, putting the Harvard-bound student and the itinerant farmer next to each other, working together and learning to view things from another person's perspective, hopefully creating more compassion between groups of people that the current system has pitted against each other.