how was the first world war the reason behind germany economic crisis
Answers
There were several characteristics which Germany possessed after the First World War which made them vulnerable to being manipulated by someone like Adolf Hitler. As in most nations, the economic factors of the time play a significant role in determining how a society will behave.
Germany was economically devastated after a draining defeat in World War I. Due to the Versailles treaty, Germany was forced to pay incredibly sizeable reparations to France and Great Britain. In addition, the Versailles treaty, which many agreed was far too harsh, forced Germany to give up thirteen percent of its land.
Lines would build up filled with people who wanted to buy the few items left in stores.Stacks of German Marks, which were practically worthless due to super inflation.
At first Germany tried to recover from the war by way of social spending. Germany began creating transportation projects, modernization of power plants and gas works. These were all used to battle the increasing unemployment rate.
Social spending was rising at an unbelievable rate. In 1913 the government was spending approximately 20.5 per resident; by 1925 it had risen to almost 65 marks per resident and finally in 1929 it reached over one hundred marks per resident.
The elevating amounts of money which were used for social spending combined with plummeting revenues caused continuing deficits. Eventually the municipal finance collapsed in 1930. Although it seemed as if the collapse was due to debt, in actuality ordinary budgets were the reason for the initial collapse.
Municipal officials and politicians were unable to restore order to the budgets. Further adding to Germany's economic problems, the revenue from income tax began to fall. In 1913, over fifty three percent of all tax revenues was from income, but in 1925, it dropped down to 28%.
As the returns on income taxes decreased, the government began to depend much more on state trade and property tax. The government also became highly dependent on the profits made from municipal utilities, such as electric power plants.