I used to look at graphs like that and be alarmed, but I'm thinking now that they are very misleading. A bump of x in 1920 is the same sized x in 2012, but $x in 1920 would buy substantially more gold, silver, labor, corn, wheat, etc, that $x in 2012. Basic nature of inflation. If you plotted that curve above relative to something sane, say like a 5yr running average of gold; it would be much, much flatter.
If you want to plot it, time against an inflating fiat currency, try year vs ln($outlay). Should still show solid growth in government, as there are more warm bodies, and more physical assets in production and in need of services, and more stuff that government does.
Finally, its suggested that there is something lethal about the above chart. Far from it. Its perfectly fine; though the deficit part should probably be restrained some at this point. If we need inflation to keep luxury central running, then don't expect anything else, and never assume a limit exists. There is nothing evil about a cup of coffee being priced at $150 at McDonalds. They're just numbers. Japanese have been paying 100+ Yen for coffee (we won't discuss the crime of cold coffee in cans from vending machines, but I digress...) for ages now, they seem no worse off for the experience.
Yes we are, as we are,
And so shall we remain,
Until the end.