A few things to keep in mind:
1) No U.S. government, ever---save for three brief recession periods of 3-4 years each---held the budget steady, let alone "cut" the size of government PER CAPITA. Did not happen. Thomas Jefferson, considered a "small government guy" authorized and supported a $10 million (!!) public works program when the ENTIRE federal budget wasn't $10 million. That would be equivalent to Obama proposing a $2-3 trillion single program.
2) The largest single bureaucracy before the Civil War was not the Army, but the U.S. Post Office, larger than the Army and Navy combined. Unlike today, it was entirely politicized and beholden to the President. This would be equivalent to making the U.S. military today political.
3) We had a 100% politicized media prior to Abraham Lincoln. While Lincoln is excoriated by libertarians as an "oppressive" president in his dealings with the press, in fact newspapers actually SHIFTED away from politicized news---wherein 80% of antebellum papers were solely and completely backed by a single party---to what we would call "News" news. They stopped being propaganda organs and began reporting news; they began to pay their own way through subscriptions, not political largesse; and they adopted real business models. By 1890, 80% of America's papers were NON-political.
4) We are moving away from inflation, not toward it. We have to remember that the Fed's great screw up in the Great Depression was to NOT inject sufficient currency into the system, thus causing a deflation from 1929-1932 in which one-third of the money supply disappeared. So far, despite the massive influx of money, there is no indication that we are heading toward inflation. Gold and oil remain reasonably low---and certainly aren't skyrocketing. The collapse of banks automatically shrinks the money supply by "destroying" dollars. This is the great threat, not Weimar-Germany type hyperinflation.