the developed world should have greatly lowered public spending and balanced the budgets decades ago.

High public spending is positively correlated to high GDP. As far as I know there is no such connection between high public spending and public debt. Ie the United States.

Also, you are saying that public spending between 30 and 45 percent can't be increased sufficiently to stimulate the economy.

Since some of the countries that have been binging on cheap credit the last few years are among the ones with the lowest public expenditures in the OECD, it seems that they at least have some room for boosting the state sector. Providing they are willing to raise taxes on the wealthy that is.

we have been living in a constant keynesian boost context since the end of WWII

I agree that the US government was under constant stimulation, especially the last 8 (or 28) years. But is there anything Keynesian in the "supply side" tax cut stimulation, particularly?

There is no way to avoid a long, secular decline in standards of living everywhere on the planet.

Only if one defines "High Standard of Living" with "continuous consumption of useless stuff you don't need and never use."  

In my village in New Mexico there's a group of us who are getting fairly serious about community-based (with 10 kilometers) consumption: food, fuel, power, water, consumer goods, & etc.  Keeping our dollars in the area would improve the standard of living of the village as a whole.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre