We didn’t apply near the full strength of our fighting power on Iraq or Afghanistan. We could have wiped out their countries, and we would not have had to touch our nuclear arsenal either. We spend half the world’s defense budget (that’s a fact). Part of the reason we do is we provide about half of the world’s defense. We do not need to defend Europe anymore. The USSR at the height of its power was a threat to the entire world, but modern Russia simply does not have the resources to be a threat. They are killing themselves with drunkenness and low birthrates, all thanks to the remnants of the culture Marxist-Leninism. As I pointed out, China’s navy can be sent to the bottom by half of ours. They are no threat in the near term. They might become a threat later in the century, but we can respond to that when it comes.
First of all, you compare how much the US spends on defense vs the rest of the world. The problem with that is that what we pay for people and things is not comparable to what other countries pay. For instance, the average Chinese soldier gets paid about 1/4 (or less) than the average US soldier. I would guess that the same goes for other military costs - they pay quite a bit less per item/activity. While we have a superior military, 4 to 1 numerical advantage is more difficult to overcome. Further, we have a superior military because we spend so much.
The second issue is your statement They might become a threat later in the century, but we can respond to that when it comes. That is how we got into WWII with such an inadequate force, by waiting to respond to threats when they come. Our government, by design, responds to new threats slowly. We need to stay in front, to keep the deterrence factor at a high level.
That said, we do not need to station ground troops in Europe or some of the other areas of the world. Your ratio of active to reserve is also a bit low, but can be reduced. In short, there are many ways to save, but cut with a sharp knife, not a hatchet (much of the rest of the government, the hatchet could be replaced with an axe).