Even assuming what you're saying is correct and government spending doesn't matter (odd thing to say when you're arguing that the government has been "gutted,") your own chart is only flat over time because of USPS workers being less due to automation/retirement and there being less military recruitment (both account for about ~1.5M employees lost,) and doesn't include offloading to contractors. Underlying agencies and government is bigger than ever before. The government (federal AND state levels) itself is much larger, with more regulations, than it was even 20 years ago.

Every company has bureaucracy, but it's nothing compared to government work. Also, government has no competition, bureaucracy in big companies will eventually be punished (even if it takes a long time.) In government it is often rewarded, both internally and externally (via regulatory capture, etc.)

In any case, saying the federal government has been "gutted" is a flat lie. I don't see how people can argue otherwise. I want more money going to NASA, and more money going to civil projects like HSR, but would that magically remove 15 years of bureaucratic mess? No. More money to these projects can only happen on a large political scale if/when the bureaucratic red tape is cut to lower the costs. Adding an additional layer of bureaucrats and middle managers and pot of gold everyone can dip their hands in before it reaches the final project doesn't fix the issue.