government reaction

• the government attempted deficit financing, which referred to Germany spending more than ut received in order to stimulate the economy, as more money for people to spend will cause more demand, therefore causing more employment
• deficit financing aimed to mobilise returning troops by giving them work, but this added to Germany's national debt and inflation.
• germany implemented new social welfare such as the youth welfare law (1922) which ensured local authorities made provisions of education, safety, and sports for all kids. they also began giving war pensions from 1920.
• high government spending through social welfare added to inflation, therefore harming the german economy
• in 1919, Erzberger became finance minister (Schiedemann's successor), and he allowed the central government to collect taxation directly. he took the tax burden away from the lower/middle class through the Kriegsabgaben (a war tax on profits made from the war)
• Erzberger introduced the first inheritance tax as well as a one off emergency tax in july 1919. this was successful however the german public did not like increased taxation
• chancellor Joseph Wirth (1921) accepted reparations payments and implemented the policy of fulfillment. he was the first chancellor to make a reparations payment on time