Since just after world war 2, most world's currencies were backed by USD which was backed by gold, due to the fact that any country could redeem their dollar re

Since just after world war 2, most world's currencies were backed by USD which was backed by gold, due to the fact that any country could redeem their dollar reserves for gold at a pegged rate. In 1971 the US broke that agreement, known as the Bretton Woods agreement, and stopped redeeming USD for gold to other countries. So the currencies devalued at least as fast as USD from that point, which explains the same income declines. I wouldn't be so quick to call government spending a different ledger. Governments borrow to spend, they tax to rein in devaluation of their currency, as per modern monetary theory. When they borrow they print money, and a significant chunk of international debt is denominated in USD, so such debt would see a real term devaluation as the federal reserve expands the money supply. This would show up as price inflation for goods and services purchased by the government, inelastic goods and services would plausably show an increase as a percentage of total spending.