[Colored notes added]
The crony nature of big government causes growing poverty (a shrinking economic pie). But growing poverty eventually threatens the living standards of elites.
This makes the elites become incentivized to attempt a social-contract “Reset” where they codify their higher living standards into law (by intentionally fixating the living standards of others lower).
This “reset” allows them to remain as rich as before, even while they continue interfering with economic freedom, shrinking the economic pie even further.
The break-point in the graph shows the combination of two successive interferences with economic freedom:
Step 1:
When LBJ’s Great Society plan led to erecting federal offices (read: “power”) in each state of the USA (federal offices were not located in each state before that)Step 2:
When Nixon closed the Gold Window (put the USA onto entirely fiat money)
Reference
[annual GDP] — U.S. Bureau of Economic Analysis, Gross Domestic Product [GDPA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDPA
[annual budget balance of total government] — U.S. Bureau of Economic Analysis, Net government saving [A922RC1A027NBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A922RC1A027NBEA