Aye, that we are. Why? Because we've allowed politicians, left and right (best exemplified recently by Bush, imho) to let us believe we can have our cake and eat it to. They, in turn, have cynically exploited this for their own agenda.
"Starving the beast"? Right or wrong, that choice should be up to the people if you believe in democracy. When asked directly, people have shown they favor the middle course, as they have with environmental issues. How do you convince them otherwise? By pretending that there will be no consequences for the excesses of the present. As disgusting as pretending that massive taxation and wasteful social programs have no economic cost. Using such ruses to further your own ideological agenda and subvert democracy transcends disgusting and is the hallmark of extremism left and right.