2- or 2 1/2-inch star-shaped cookie cutter; half sheet pan or jelly roll pan; 8 1/2-by-4 1/2-inch loaf pan; plastic piping bags or resealable plastic bags; star tip for piping, such as a Wilton #32 tip
Preheat the oven to 350 degrees F. Coat a half sheet pan or jelly roll pan with cooking spray.
For the red-and-blue cake: Combine the flour and baking powder in a medium bowl. Beat the sugar and butter with an electric mixer in a large bowl until smooth. Beat in the vanilla. Beat in the eggs, one at a time. Gradually add the flour mixture, mixing until fully incorporated. Stir in the milk until the batter is smooth.
Divide the batter between two medium bowls. Use food coloring to tint one bowl red and the other blue. Transfer each of the colored batters to plastic piping bags or resealable plastic bags. Snip the end of each bag, and pipe your batter into the half sheet pan or jelly roll pan in 1/2-inch-thick rows, alternating colors.
Bake the sheet cake until a toothpick inserted into the center comes out clean, 12 to 15 minutes. Let the cake cool to room temperature. Once cool, use a star-shaped cookie cutter to cut out shapes from the striped cake.
For the white cake: Combine the flour and baking powder in a medium bowl. Beat the sugar and butter with an electric mixer in a large bowl until smooth. Beat in the vanilla. Beat in the eggs, one at a time. Gradually add the flour mixture, mixing until fully incorporated. Stir in the milk until the batter is smooth. Transfer the batter to a piping bag or resealable plastic bag. Coat an 8 1/2-by-4 1/2-inch loaf pan with cooking spray. Pipe a thin layer of the white batter, about 1 inch deep, into the bottom of the pan.
In the loaf pan, stand the star cakes upright and press them into the batter, creating two rows, side by side. Pipe the remaining white batter into the pan, covering the stars.
Bake the loaf for 35 to 40 minutes, until a toothpick inserted into the center of the cake comes out clean. Cool the cake in the pan on a wire rack for 5 minutes, then unmold it and cool to room temperature.
For the buttercream frosting: Beat the butter until it is light and fluffy, preferably in a stand mixer with the paddle attachment on medium speed. With the mixer on low speed, gradually add the confectioners' sugar, 1 to 2 cups at a time, allowing each batch to incorporate with the butter. (Use less confectioners' sugar for a slightly more buttery, looser frosting; use more confectioners' sugar for a slightly sweeter, stiffer frosting.) Increase the speed to medium, and add the salt, vanilla extract and cream. Beat until smooth, an additional 3 minutes.
Use a serrated knife to level the cake and to carve off any dark brown spots. Place the cake on a serving plate.
Frost the cake with an initial thin layer of buttercream. Place the cake in the refrigerator for at least 15 minutes to allow the frosting to harden. (Note: This first layer doesn't need to look perfect, as the next layer of buttercream will cover it up.)
Using an offset spatula, and working in an upward direction around the cake, add a second layer of frosting, approximately 1/2 inch thick. Add the remaining buttercream to a piping bag or resealable plastic bag fitted with a star tip (such as a Wilton #32 tip). Working in rows, pipe small dollops of frosting onto the top of your cake.
Sprinkle with the red, white and blue sprinkles.
Cook's Note: When measuring flour, we spoon it into a dry measuring cup and level off the excess. (Scooping directly from the bag compacts the flour, resulting in dry baked goods.)