Comment by DrNosferatu

German fascism didn't actually rise during the hyperinflation of 1922-1923. Hitler's first attempt at power (the Beer Hall Putsch) failed miserably in November 1923 just as hyperinflation was ending[9].

The Nazis only became a major political force years later during the DEFLATIONARY period of 1930-1933. Heinrich Brüning's government implemented brutal austerity in response to the Depression - slashing wages by 25%, quadrupling pension contributions, and cutting social spending by two-thirds[12]. This deflationary policy was economic malpractice that caused massive suffering.

Recent research confirms that "localities that experienced larger declines in spending and higher rises in taxes had higher vote shares for the Nazi Party in each and every German federal election between 1930 and 1933"[11]. Each standard deviation increase in austerity severity correlated with a 2-5 percentage point increase in Nazi votes[11].

The political establishment's obsession with balancing budgets through austerity crushed the working and middle classes, creating mass unemployment (reaching 6 million by 1932)[9] and pushing desperate voters toward radical solutions. As Hjalmar Schacht warned in 1930: "if the German people are going to starve, there are going to be many more Hitlers"[11].

This history matters today. When elites respond to economic crisis with deflation and austerity that protects creditors while immiserating workers, they create the perfect conditions for fascism. The CEPR's conclusion is chilling: "too much harsh austerity can trigger social unrest and unintended political consequences"[11].

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