It looks to me like the first thing you need to do is power up the machine & shake down every axis with considerable force (don't overpower it) - and see if you can track down if the pinions are loose. Those cuts are horrible.
You should NOT be using a ball end tool unless you are doing 3D or decorative engraving. The tapered bit should be square. Your RPM is too low for plastic - you want to be in the 16-18k range, and slow that move speed down. Shoot for 1.2,0.7 for your XY, Z speeds and adjust as needed. No sense in running 2" per sec on a 2" tall letter, right? Do your cuts in multiple passes using a smooth ramped entry (in profile toolpath options in VCP/Aspire) - 1 pass may be too deep causing the motors to stall.
You may also want to adjust your VR settings to the numbers I lay out in the
Ramping Article - but check for mechanical slop first.
Let us know how you make out. What model machine are you running...Assuming it is a Standard?
-B