The problem is not government policy per se, but rather short-term ness of the policy in question, and the extreme partisanship that developed in the past 10-20 years.
Spending is hardly a problem if one's credit is good and one can pay for it with future income. Yes, US has a lot of debt, but US is not suffering from a credit problem or an income problem... at least in the short term.
It's the extremism in the Republican party that seem to be the primary problem, IMHO. Instead of learning from their defeat to Obama, they seem to have learned the wrong lessons and determined have not antagonized the mainstream enough and wants to go FURTHER to the right, well into tea party territory. Their willingness to hit the fiscal cliff and force the sequester just to spite the democrats is both hilarious and troubling.
The world is changing. Jobs have gone high tech. Yet the tip-top of the world, the uberrich, seem to be the people who don't really "work" (actors, athletes, college drop-out CEOs...) thus people are getting the wrong ideas about how to advance in life. Having so-called "financial gurus" like Kiyosaki feeding you crap like "Conspiracy of the Rich" doesn't help either. The ubiquity of the media has magnified sections of society and created a distorted image of reality.
So no, the American economy is NOT going the way of the dogs just yet. Keynesian economists says you need to spend to "feed" the economy, then increase taxes when the growth is back, to smooth out the peaks and the valleys.