I'm no fan of Bush, but I find myself arguing against certain misconceptions about his fiscal performance which continue to persist. One such misconception is that he spent an insane amount of money on the military. Nominally (that is, in raw dollar amounts) this appears to be true, but while he did increase funding relative to the Clinton administration it was still very low by historical standards.
So let's start with a picture. Here is a graph of defense spending as a percentage of GDP from 1940 to 2003.So the end of the cold war did result in a peace dividend (lower defense spending) and this situation persisted through 2003. Bush did increase funding from the low point in 2000 but only to circa 1994 levels.
After 2003 the picture is more complicated because the Iraq war spending is not reported. I took Iraq war spending numbers and combined them with reported military outlays and then divided by nominal GDP. The result is summarized in the following graphic, where I include the levels from corresponding years in previous decades for reference.
Here we can see that even in 2006 with the Iraq war in full swing we spent less on total military expenditures relative to GDP than during 1976 (with the Vietnam war fully wound down) or 1986 (at the height of the cold war). The 1990s were definitely a period of relative low military expenditures but in historical perspective Bush's spending on defense was not very high even with Iraq war expenditures accounted for (and by the way, the entire practice of keeping things off the budget is very distasteful, shame on the Bush administration for that).
In particular we can still claim a peace dividend during the 2000s relative to the cold war.