122-971: (Redirected from Vienna Arbitration ) [REDACTED] The Vienna Award (also called the Vienna Arbitration or Vienna Diktat ) was either of two arbitral decisions made by Nazi Germany and Fascist Italy rewarding disputed territory to Hungary . Both decisions were made at the Belvedere Palace , in Vienna , just before and after the Second World War (1939–1945) started. First Vienna Award (2 November 1938): Hungary received part of southern Czechoslovakia (now part of modern-day Slovakia ). Second Vienna Award (30 August 1940): Hungary received Northern Transylvania from Romania . [REDACTED] Index of articles associated with
244-750: A balanced budget (and a surplus to pay down any outstanding debt), and that deficit spending is always bad policy. The neoclassical -inclined Chicago school of economics has supported fiscal conservative ideas. Numerous states of the United States have a balanced budget amendment to their state constitution, and the Stability and Growth Pact of the European Monetary Union punishes government deficits of 3% of GDP or greater. Proponents of fiscal conservatism date back to Adam Smith , founder of modern economics. Fiscal conservatism
366-477: A false analogy to borrowing by individuals. Current reality is almost the exact opposite. Deficits add to the net disposable income of individuals, to the extent that government disbursements that constitute income to recipients exceed that abstracted from disposable income in taxes, fees, and other charges. This added purchasing power, when spent, provides markets for private production, inducing producers to invest in additional plant capacity, which will form part of
488-476: A pervasive cult of personality around Adolf Hitler to influence public opinion. The government controlled artistic expression, promoting specific art forms and banning or discouraging others. Genocide , mass murder , and large-scale forced labour became hallmarks of the regime; the implementation of the regime's racial policies culminated in the Holocaust . After the initial success of German invasion of
610-488: A communist uprising. The Reichstag Fire Decree , imposed on 28 February 1933, rescinded most civil liberties, including rights of assembly and freedom of the press. The decree also allowed the police to detain people indefinitely without charges. The legislation was accompanied by a propaganda campaign that led to public support for the measure. Violent suppression of communists by the SA was undertaken nationwide and 4,000 members of
732-462: A growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity. When the outlay of a government (i.e., the total of its purchases of goods and services, transfers in grants to individuals and corporations, and its net interest payments) exceeds its tax revenues , the government budget is said to be in deficit ; government spending in excess of tax receipts
854-580: A massive secret rearmament program , forming the Wehrmacht (armed forces). The return to economic stability boosted the regime's popularity. Germany made increasingly aggressive territorial demands, threatening war if they were not met. Germany seized Austria in the Anschluss of 1938, and demanded and received the Sudetenland region of Czechoslovakia. Germany signed a non-aggression pact with
976-657: A non-aggression pact with Poland. In March 1939, Hitler demanded the return of the Free City of Danzig and the Polish Corridor , a strip of land that separated East Prussia from the rest of Germany. The British announced they would come to the aid of Poland if it was attacked. Hitler, believing the British would not take action, ordered an invasion plan should be readied for September 1939. On 23 May, Hitler described to his generals his overall plan of not only seizing
1098-431: A predictable pattern. The cyclical deficit is the deficit experienced at the low point of this cycle when there are lower levels of business activity and higher levels of unemployment . This leads to lower government revenues from taxation and higher government expenditure on things like social security , which may cause the economy to go into deficit. While the cyclical component is affected by government decisions, it
1220-474: A protectorate of France under the condition that its residents would later decide by referendum which country to join, and Poland became a separate nation and was given access to the sea by the creation of the Polish Corridor , which separated Prussia from the rest of Germany, while Danzig was made a free city . Germany regained control of the Saarland through a referendum held in 1935 and annexed Austria in
1342-437: A recession, deficits usually rise in the more affluent countries. Revenue from progressive taxes based on economic activity (income, expenditure, or transactions) falls. Other sources of tax revenue such as wealth taxes , notably property taxes , are not subject to recessions, though they are subject to asset price bubbles. Transfer payments due to increased unemployment and reduced household income rise. Most economists favor
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#17327662964131464-582: A result of the maximum feasible growth in real output might indeed cause problems, but we are nowhere near that level. Even the analogy itself is faulty. If General Motors, AT&T, and individual households had been required to balance their budgets in the manner being applied to the Federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones, and houses." Advocates of fiscal conservatism reject Keynesianism by arguing that government should always run
1586-459: A second national anthem. Germany was still in a dire economic situation, as six million people were unemployed and the balance of trade deficit was daunting. Using deficit spending , public works projects were undertaken beginning in 1934, creating 1.7 million new jobs by the end of that year alone. Average wages began to rise. The SA leadership continued to apply pressure for greater political and military power. In response, Hitler used
1708-713: A substantial minority of Germans, who lived mostly in the Sudetenland . Under pressure from separatist groups within the Sudeten German Party , the Czechoslovak government offered economic concessions to the region. Hitler decided not just to incorporate the Sudetenland into the Reich, but to destroy the country of Czechoslovakia entirely. The Nazis undertook a propaganda campaign to try to generate support for an invasion. Top German military leaders opposed
1830-626: A thousand people (out of a population of around 16,000) committed suicide in Demmin around 1 May 1945 as the 65th Army of 2nd Belorussian Front first broke into a distillery and then rampaged through the town, committing mass rapes, arbitrarily executing civilians, and setting fire to buildings. High numbers of suicides took place in many other locations, including Neubrandenburg (600 dead), Stolp in Pommern (1,000 dead), and Berlin, where at least 7,057 people committed suicide in 1945. Estimates of
1952-896: A war fought on two fronts. The invasion conquered a huge area, including the Baltic states, Belarus , and west Ukraine . After the successful Battle of Smolensk in September 1941, Hitler ordered Army Group Centre to halt its advance to Moscow and temporarily divert its Panzer groups to aid in the encirclement of Leningrad and Kyiv . This pause provided the Red Army with an opportunity to mobilise fresh reserves. The Moscow offensive, which resumed in October 1941, ended disastrously in December . On 7 December 1941, Japan attacked Pearl Harbor , Hawaii. Four days later, Germany declared war on
2074-515: A war of conquest to obtain more territory. The Saarland , which had been placed under League of Nations supervision for 15 years at the end of World War I, voted in January 1935 to become part of Germany. In March 1935, Hitler announced the creation of an air force, and that the Reichswehr would be increased to 550,000 men. Britain agreed to Germany building a naval fleet with the signing of
2196-557: Is correct for a nation and its government. A similar argument is that deficit spending today will require increased taxation in the future, thus burdening future generations. (See generational accounting for discussion.) Others argue that because debt is both owed by and owed to private individuals, there is no net debt burden of government debt, just wealth transfer (redistribution) from those who owe debt (government, backed by tax payers) to those who hold debt (holders of government bonds). A related line of argument, associated with
2318-503: Is derived from Keynesian economics , and gained acceptance during the period between the Great Depression in the 1930s and post-WWII in the 1950s. This position is attacked from both sides: Advocates of federal-level fiscal conservatism argue that deficit spending is always bad policy, while some post-Keynesian economists—particularly neo-chartalists or proponents of Modern Monetary Theory —argue that deficit spending
2440-656: Is different from Wikidata All set index articles Nazi Germany Nazi Germany , officially known as the German Reich and later the Greater German Reich , was the German state between 1933 and 1945, when Adolf Hitler and the Nazi Party controlled the country, transforming it into a totalitarian dictatorship . The Third Reich , meaning "Third Realm" or "Third Empire", referred to
2562-554: Is issued and spent ; the amount of fiat money in circulation is exactly the government debt —money spent but not collected in taxes. In a quip, "fiat money governments are 'spend and tax', not ' tax and spend '"—deficit spending comes first. Chartalists argue that nations are fundamentally different from households. Governments in a fiat money system which only have debt in their own currency can issue other liabilities, their fiat money, to pay off their interest bearing bond debt. They cannot go bankrupt involuntarily because this fiat money
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#17327662964132684-415: Is known as deficit spending. For a government that uses accrual accounting (rather than cash accounting ) the budget balance is calculated using only spending on current operations, with expenditure on new capital assets excluded. Governments usually issue bonds to match their deficits. They can be bought by its Central Bank through open market operations . Otherwise the debt issuance can increase
2806-401: Is mainly influenced by national and international economic conditions which can be significantly beyond government control. A structural (permanent) deficit differs from a cyclical deficit in that it exists regardless of the point in the business cycle due to an underlying imbalance in government revenues and expenditures. Thus, even at the high point of the business cycle when revenues are high
2928-437: Is necessary for the issuance of new money, and not only for fiscal stimulus. According to most economists, during recessions, the government can stimulate the economy by intentionally running a deficit. The deficit spending requested by John Maynard Keynes for overcoming crises is the monetary side of his economy theory. As investment equates to real saving, money assets that build up are equivalent to debt capacity. Therefore,
3050-518: Is stimulated, that increases the ability of the economy to supply output in the long run. Also, if the government's deficit is spent on such things as infrastructure, basic research, public health, and education, that can also increase potential output in the long run. Finally, the high demand that a government deficit provides may actually allow greater growth of potential supply, following Verdoorn's law . Deficit spending may create inflation , or encourage existing inflation to persist. For example, in
3172-453: Is that deficit spending is desirable and necessary as part of countercyclical fiscal policy , but that there should not be a structural deficit (i.e., permanent deficit): The government should run deficits during recessions to compensate for the shortfall in aggregate demand , but should run surpluses in boom times so that there is no net deficit over an economic cycle (i.e., only run cyclical deficits and not structural deficits). This
3294-461: Is to address high levels of debt and a poor debt-to-GDP ratio by monetising the debt , essentially creating more money to be used to pay off the debt. Monetising the debt can lead to high levels of inflation , but with proper fiscal control this can be minimised or even avoided . Both it and the final option of defaulting on the debt are thought to be poor results for investors . There having been recent incidents involving quantitative easing in
3416-469: Is what is used in their economy to settle debts, while household liabilities are not so used. This view is summarized as: But it is hard to understand how the concept of "budget busting" applies to a government which, as a sovereign issuer of its own currency, can always create dollars to spend. There is, in other words, no budget to "bust". A national "budget" is merely an account of national spending priorities, and does not represent an external constraint in
3538-466: The Schutzstaffel (SS) and Gestapo to purge the entire SA leadership. Hitler targeted SA Stabschef (Chief of Staff) Ernst Röhm and other SA leaders who—along with a number of Hitler's political adversaries (such as Gregor Strasser and former chancellor Kurt von Schleicher )—were arrested and shot. Up to 200 people were killed from 30 June to 2 July 1934 in an event that became known as
3660-579: The Völkisch movement . The party, especially its paramilitary organisation Sturmabteilung (SA; Storm Detachment), or Brownshirts, used physical violence to advance their political position, disrupting the meetings of rival organisations and attacking their members as well as Jewish people on the streets. Such far-right armed groups were common in Bavaria , and were tolerated by the sympathetic far-right state government of Gustav Ritter von Kahr . When
3782-541: The 6th Army could be supplied by air, but this turned out to be infeasible. Hitler's refusal to allow a retreat led to the deaths of 200,000 German and Romanian soldiers; of the 91,000 men who surrendered in the city on 31 January 1943, only 6,000 survivors returned to Germany after the war. Losses continued to mount after Stalingrad, leading to a sharp reduction in the popularity of the Nazi Party and deteriorating morale. Soviet forces continued to push westward after
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3904-745: The Anglo-German Naval Agreement on 18 June 1935. When the Italian invasion of Ethiopia led to only mild protests by the British and French governments, on 7 March 1936 Hitler used the Franco-Soviet Treaty of Mutual Assistance as a pretext to order the army to march 3,000 troops into the demilitarised zone in the Rhineland in violation of the Versailles Treaty. As the territory was part of Germany,
4026-634: The Anschluss of 1938. The Munich Agreement of 1938 gave Germany control of the Sudetenland, and they seized the remainder of Czechoslovakia six months later. Under threat of invasion by sea, Lithuania surrendered the Memel district in March 1939. Between 1939 and 1941, German forces invaded Poland , Denmark , Norway , France , Luxembourg , the Netherlands , Belgium , Yugoslavia , Greece , and
4148-481: The Austrian school of economics , is that government deficits are inflationary . Anything other than mild or moderate inflation is generally accepted in economics to be a bad thing. In practice this is argued to be because governments pay off debts by printing money, increasing the money supply and creating inflation, and is taken further by some as an argument against fiat money and in favor of hard money , especially
4270-575: The Battle of Berlin (16 April – 2 May 1945), Hitler and his staff lived in the underground Führerbunker while the Red Army approached. On 30 April, when Soviet troops were within two blocks of the Reich Chancellery , Hitler and his wife Eva Braun committed suicide . On 2 May, General Helmuth Weidling unconditionally surrendered Berlin to Soviet General Vasily Chuikov . Hitler
4392-738: The Communist Party of Germany were arrested. On 23 March 1933, the Enabling Act , an amendment to the Weimar Constitution , passed in the Reichstag by a vote of 444 to 94. This amendment allowed Hitler and his cabinet to pass laws—even laws that violated the constitution—without the consent of the president or the Reichstag. As the bill required a two-thirds majority to pass, the Nazis used intimidation tactics as well as
4514-633: The German Empire (1871–1918) as the second. Severe setbacks to the German economy began after World War I ended, partly because of reparations payments required under the 1919 Treaty of Versailles . The government printed money to make the payments and to repay the country's war debt, but the resulting hyperinflation led to inflated prices, economic chaos, and food riots. When the government defaulted on their reparations payments in January 1923, French troops occupied German industrial areas along
4636-565: The Hague Convention , industrial firms in the Netherlands, France, and Belgium were put to work producing war materiel for Germany. The Nazis seized from the French thousands of locomotives and rolling stock, stockpiles of weapons, and raw materials such as copper, tin, oil, and nickel. Payments for occupation costs were levied upon France, Belgium, and Norway. Barriers to trade led to hoarding, black markets , and uncertainty about
4758-511: The League of Nations in October, claiming its disarmament clauses were unfair if they applied only to Germany. In a referendum held in November , 95 per cent of voters supported Germany's withdrawal. In 1934, Hitler told his military leaders that rearmament needed to be complete by 1942, as by then the German people would require more living space and resources, so Germany would have to start
4880-791: The Low Countries . They quickly conquered Luxembourg and the Netherlands and outmanoeuvred the Allies in Belgium , forcing the evacuation of many British and French troops at Dunkirk . France fell as well, surrendering to Germany on 22 June . The victory in France resulted in an upswing in Hitler's popularity and an upsurge in war fever in Germany. In violation of the provisions of
5002-527: The Nazi euthanasia program . Political courts called Sondergerichte sentenced some 12,000 members of the German resistance to death, and civil courts sentenced an additional 40,000 Germans. Mass rapes of German women also took place. As a result of their defeat in World War I and the resulting Treaty of Versailles, Germany lost Alsace-Lorraine , Northern Schleswig , and Memel . The Saarland became
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5124-722: The Night of the Long Knives . On 2 August 1934, Hindenburg died. The previous day, the cabinet had enacted the " Law Concerning the Head of State of the German Reich ", which stated that upon Hindenburg's death the office of Reich President would be abolished and its powers merged with those of Reich Chancellor. Hitler thus became head of state as well as head of government and was formally named as Führer und Reichskanzler ("Leader and Chancellor"), although eventually Reichskanzler
5246-522: The Ruhr and widespread civil unrest followed. The National Socialist German Workers' Party ( Nationalsozialistische Deutsche Arbeiterpartei ), commonly known as the Nazi Party, was founded in 1920. It was the renamed successor of the German Workers' Party (DAP) formed one year earlier, and one of several far-right political parties then active. The Nazi Party platform included destruction of
5368-512: The Soviet Union and invaded Poland on 1 September 1939, launching World War II in Europe . In alliance with Italy and other Axis powers , Germany conquered most of Europe by 1940 and threatened Great Britain. Racism , Nazi eugenics , anti-Slavism , and especially antisemitism were central ideological features of the regime. The Germanic peoples were considered by the Nazis to be
5490-487: The United States Vietnam-war era deficits encouraged inflation. This is especially true at low unemployment rates. But government deficits are not the only cause of inflation: It can arise due to such supply-side shocks as the oil crises of the 1970s and inflation left over from the past (e.g., inflationary expectations and the price/wage spiral ). If equilibrium is located on the classical range of
5612-734: The debt-to-GDP ratio , a basic measure of the health of an economy and an indication of the country's ability to pay off its debts. Other economists believe that provided the debt is issued in the country's own currency, and provided that currency 'floats' freely against other currencies, and provided the overall level of the deficit is not so large as to cause excessive inflation, then structural deficits are harmless. Those economists who believe that structural deficits need to be reduced argue that structural deficit issues can only be addressed by explicit and direct government policies , primarily involving reducing government spending or increasing taxation . An alternative in countries which have fiat money
5734-515: The fallacy of composition ; while the paradox of thrift (and thus deficit spending for fiscal stimulus) is widely accepted in economics, the Chartalist form is not. An alternative argument for the necessity of deficits was given by U.S. economist William Vickrey , who argued that deficits were necessary to satisfy demand for savings in excess of what can be satisfied by private investment. Larger deficits, sufficient to recycle savings out of
5856-470: The federal election of 1932 , the party was the largest in the Reichstag , holding 230 seats with 37.4 per cent of the popular vote. Although the Nazis won the greatest share of the popular vote in the two Reichstag general elections of 1932, they did not have a majority. Hitler refused to participate in a coalition government unless he was its leader. Under pressure from politicians, industrialists, and
5978-424: The large debt balances accumulated by governments across the world . Following John Maynard Keynes , many economists recommend deficit spending to moderate or end a recession , especially a severe one. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending , which creates further increases in
6100-435: The supply side , it seems, was not hurt by the large deficits and debts. A government deficit increases government debt . In many countries the government borrows by selling bonds rather than borrowing from banks. The most important burden of this debt is the interest that must be paid to bond-holders, which restricts a government's ability to raise its outlays or cut taxes to attain other goals. Usually when economists use
6222-723: The " master race ", the purest branch of the Aryan race. Jews , Romani people , Slavs , homosexuals , liberals , socialists , communists , other political opponents, Jehovah's Witnesses , Freemasons , those who refused to work , and other "undesirables" were imprisoned, deported , or murdered. Christian churches and citizens that opposed Hitler's rule were oppressed and leaders imprisoned. Education focused on racial biology , population policy, and fitness for military service. Career and educational opportunities for women were curtailed . Nazi Propaganda Ministry disseminated films, antisemitic canards , and organized mass rallies; fostering
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#17327662964136344-566: The Allied bombing campaign became even more devastating. By targeting oil refineries and factories, they crippled the German war effort by late 1944. On 6 June 1944, American, British, and Canadian forces established a front in France with the D-Day landings in Normandy . On 20 July 1944 , Hitler survived an assassination attempt. He ordered brutal reprisals, resulting in 7,000 arrests and
6466-456: The British and French governments did not feel that attempting to enforce the treaty was worth the risk of war. In the one-party election held on 29 March, the Nazis received 98.9 per cent support. In 1936, Hitler signed an Anti-Comintern Pact with Japan and a non-aggression agreement with Mussolini, who was soon referring to a "Rome-Berlin Axis". Hitler sent military supplies and assistance to
6588-764: The German National People's Party – their former coalition partners – which then disbanded on 29 June. The remaining major political parties followed suit. On 14 July 1933 Germany became a one-party state with the passage of the Law Against the Formation of Parties , decreeing the Nazi Party to be the sole legal party in Germany. The founding of new parties was also made illegal, and all remaining political parties which had not already been dissolved were banned. Further elections in November 1933 , 1936 , and 1938 were Nazi-controlled, with only members of
6710-594: The German state in the Nazi era are "Nazi Germany" and the "Third Reich", which Hitler and the Nazis also referred to as the "Thousand-Year Reich" ( Tausendjähriges Reich ). The latter, a translation of the Nazi propaganda term Drittes Reich , was first used in Das Dritte Reich , a 1923 book by Arthur Moeller van den Bruck . The book counted the Holy Roman Empire (962–1806) as the first Reich and
6832-676: The Nationalist forces of General Francisco Franco in the Spanish Civil War , which began in July 1936. The German Condor Legion included a range of aircraft and their crews, as well as a tank contingent. The aircraft of the Legion destroyed the city of Guernica in 1937. The Nationalists were victorious in 1939 and became an informal ally of Nazi Germany. In February 1938, Hitler emphasised to Austrian Chancellor Kurt Schuschnigg
6954-579: The Nazi claim that Nazi Germany was the successor to the earlier Holy Roman Empire (800/962–1806) and German Empire (1871–1918). The Third Reich, which the Nazis referred to as the Thousand-Year Reich , ended in May 1945, after only 12 years, when the Allies defeated Germany and entered the capital, Berlin , ending World War II in Europe . After Hitler was appointed Chancellor of Germany by
7076-421: The Party and a small number of independents elected. All civilian organisations had their leadership replaced with Nazi sympathisers or party members, and either merged with the Nazi Party or faced dissolution. The Nazi government declared a "Day of National Labor" for May Day 1933, and invited many trade union delegates to Berlin for celebrations. The day after, SA stormtroopers demolished union offices around
7198-403: The Polish Corridor but greatly expanding German territory eastward at the expense of Poland. He expected this time they would be met by force. The Germans reaffirmed their alliance with Italy and signed non-aggression pacts with Denmark, Estonia, and Latvia whilst trade links were formalised with Romania, Norway, and Sweden. Foreign Minister Joachim von Ribbentrop arranged in negotiations with
7320-411: The President of the Weimar Republic Paul von Hindenburg on 30 January 1933, the Nazi Party began to eliminate political opposition and consolidate power. Hindenburg died on 2 August 1934, and Hitler became dictator by merging the powers of the chancellery and presidency. A 1934 German referendum confirmed Hitler as sole Führer (leader). Power was centralised in Hitler's person, and his word became
7442-402: The RAF in what became known as the Battle of Britain , and by the end of October, Hitler realised that air superiority would not be achieved. He permanently postponed the invasion, a plan which the commanders of the German army had never taken entirely seriously. Several historians, including Andrew Gordon , believe the primary reason for the failure of the invasion plan was the superiority of
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#17327662964137564-456: The Royal Navy, not the actions of the RAF. In February 1941, the German Afrika Korps arrived in Libya to aid the Italians in the North African Campaign . On 6 April, Germany launched an invasion of Yugoslavia and Greece . All of Yugoslavia and parts of Greece were subsequently divided between Germany, Hungary, Italy, and Bulgaria. On 22 June 1941, contravening the Molotov–Ribbentrop Pact, about 3.8 million Axis troops attacked
7686-441: The Soviet Union . Germany annexed parts of northern Yugoslavia in April 1941, while Mussolini ceded Trieste , South Tyrol , and Istria to Germany in 1943. Deficit spending Within the budgetary process , deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit , or budget deficit , the opposite of budget surplus . The term may be applied to
7808-493: The Soviet Union a non-aggression pact, the Molotov–Ribbentrop Pact , signed in August 1939. The treaty also contained secret protocols dividing Poland and the Baltic states into German and Soviet spheres of influence. Germany's wartime foreign policy involved the creation of allied governments controlled directly or indirectly from Berlin. They intended to obtain soldiers from allies such as Italy and Hungary and workers and food supplies from allies such as Vichy France . Hungary
7930-506: The Soviet Union attacked from the east on 17 September. Reinhard Heydrich , chief of the Sicherheitspolizei (SiPo; Security Police) and Sicherheitsdienst (SD; Security Service), ordered on 21 September that Polish Jews should be rounded up and concentrated into cities with good rail links. Initially the intention was to deport them further east, or possibly to Madagascar . Using lists prepared in advance , some 65,000 Polish intelligentsia, noblemen, clergy, and teachers were murdered by
8052-441: The Soviet Union in 1941, Nazi Germany attempted to implement the Generalplan Ost and Hunger Plan , as part of its war of extermination in Eastern Europe. The Soviet resurgence and entry of the US into the war meant Germany lost the initiative in 1943 and by late 1944 had been pushed back to the 1939 border. Large-scale aerial bombing of Germany escalated and the Axis powers were driven back in Eastern and Southern Europe. Germany
8174-443: The Soviet Union. In addition to Hitler's stated purpose of acquiring Lebensraum , this large-scale offensive—codenamed Operation Barbarossa —was intended to destroy the Soviet Union and seize its natural resources for subsequent aggression against the Western powers. The reaction among Germans was one of surprise and trepidation as many were concerned about how much longer the war would continue or suspected that Germany could not win
8296-406: The UK, the U.S. and the Eurozone following the 2008 global financial crisis. These are the first instances of either since the dropping of the gold standard . Structural deficits may be planned, or may be unintentional due to poor economic management or a fundamental lack of economic capacity in a country. In a planned structural deficit, the government may commit to spending money on the future of
8418-419: The United States. Food was in short supply in the conquered areas of the Soviet Union and Poland, as the retreating armies had burned the crops in some areas, and much of the remainder was sent back to the Reich. In Germany, rations were cut in 1942. In his role as Plenipotentiary of the Four Year Plan , Hermann Göring demanded increased shipments of grain from France and fish from Norway. The 1942 harvest
8540-444: The Weimar Republic, rejection of the Treaty of Versailles, radical antisemitism , and anti- Bolshevism . They promised a strong central government, increased Lebensraum ("living space") for Germanic peoples, formation of a national community based on race, and racial cleansing via the active suppression of Jews , who would be stripped of their citizenship and civil rights. The Nazis proposed national and cultural renewal based upon
8662-451: The blockade, imports into Germany declined by 80 per cent. To safeguard Swedish iron ore shipments to Germany, Hitler ordered the invasion of Denmark and Norway , which began on 9 April. Denmark fell after less than a day , while most of Norway followed by the end of the month. By early June, Germany occupied all of Norway . Against the advice of many of his senior military officers, in May 1940 Hitler ordered an attack on France and
8784-638: The breakdown of the economy, preventing private money savings to be run down by private debt. The monetary mechanism describing how revenue surpluses enforce corresponding expense surpluses, and how these in turn lead to economic breakdown was explained by Wolfgang Stützel much later by the means of his Balances Mechanics . William Vickrey , awarded the 1996 Nobel Memorial Prize in Economic Sciences, identified deficits being viewed as profligate spending as his #1 fallacy of Financial Fundamentalism when he commented: "This fallacy seems to stem from
8906-415: The budget of a government, private company, or individual. A central point of controversy in economics, government deficit spending was first identified as a necessary economic tool by John Maynard Keynes in the wake of the Great Depression . Government deficit spending is a central point of controversy in economics, with prominent economists holding differing views. The mainstream economics position
9028-464: The business community, President Paul von Hindenburg appointed Hitler as Chancellor of Germany on 30 January 1933. This event is known as the Machtergreifung ("seizure of power"). On the night of 27 February 1933, the Reichstag building was set afire . Marinus van der Lubbe , a Dutch communist, was found guilty of starting the blaze. Hitler proclaimed that the arson marked the start of
9150-513: The churches. The Nazi regime abolished the symbols of the Weimar Republic—including the black, red, and gold tricolour flag —and adopted reworked symbolism. The previous imperial black, white, and red tricolour was restored as one of Germany's two official flags; the second was the swastika flag of the Nazi Party, which became the sole national flag in September 1935. The Party anthem " Horst-Wessel-Lied " ("Horst Wessel Song") became
9272-411: The country in order to improve the productive potential of the economy, for example investing in infrastructure , education , or transport , with the intention that this investment will yield long-term economic gains. If these investments work out as planned the structural deficit will be dealt with over the long-term due to the returns on investment. However, if expenditures continue to exceed revenues,
9394-411: The country's economy may still be in deficit. The structural component of the budget is used by some economists as an indication of a government's financial management, as it indicates the underlying balance between long-term government revenues and expenditure, while removing factors that are mainly attributable to the business cycle. Other economists see the structural deficit as simply a reflection of
9516-603: The country; all trade unions were forced to dissolve and their leaders were arrested. The Law for the Restoration of the Professional Civil Service , passed in April, removed from their jobs all teachers, professors, judges, magistrates, and government officials who were Jewish or whose commitment to the party was suspect. This meant the only non-political institutions not under control of the Nazis were
9638-513: The demand for business output. (This is the multiplier effect .) This raises the real gross domestic product (GDP) and the employment of labour, and if all else is constant, lowers the unemployment rate. (The connection between demand for GDP and unemployment is called Okun's law .) The increased size of the market, due to government deficits, can further stimulate the economy by raising business profitability and spurring optimism, which encourages private fixed investment in factories, machines, and
9760-454: The demand for loanable funds and thus (ignoring other changes) pushes up interest rates. Rising interest rates can crowd out, or discourage, fixed private investment spending, canceling out some or even all of the demand stimulus arising from the deficit—and perhaps hurting long-term supply-side growth. Increased deficits also raise the amount of total income received, which raises the amount of saving done by individuals and corporations and thus
9882-406: The economy—the amount of bank money grows, while the base money supply remains unchanged or grows at a slower rate, and thus the ratio (leverage = credit/base) increases—which can lead to a credit bubble and a financial crisis . Chartalism is a small minority view in economics; while it has had advocates over the years, and influenced Keynes, who specifically credited it, A notable proponent
10004-563: The electorate in a plebiscite . Most Germans were relieved that the conflicts and street fighting of the Weimar era had ended. They were deluged with propaganda orchestrated by Minister of Public Enlightenment and Propaganda Joseph Goebbels , who promised peace and plenty for all in a united, Marxist-free country without the constraints of the Versailles Treaty. The Nazi Party obtained and legitimised power through its initial revolutionary activities, then through manipulation of legal mechanisms,
10126-529: The end of 1939 in an attempt to destroy Poland's identity as a nation. Soviet forces advanced into Finland in the Winter War , and German forces saw action at sea. But little other activity occurred until May, so the period became known as the " Phoney War ". From the start of the war, a British blockade on shipments to Germany affected its economy. Germany was particularly dependent on foreign supplies of oil, coal, and grain. Thanks to trade embargoes and
10248-602: The establishment of the Nuremberg Laws of 1935, which stripped them of their basic rights. The Nazis would take from the Jews their wealth, their right to intermarry with non-Jews, and their right to occupy many fields of labour (such as law, medicine, or education). Eventually the Nazis declared the Jews as undesirable to remain among German citizens and society. As early as February 1933, Hitler announced that rearmament must begin, albeit clandestinely at first, as to do so
10370-418: The excess saving of money in time of crisis should correspond to increased levels of borrowing , as this generally doesn't happen - the result is intensification of the crisis, as revenues from which money could be saved decline while a higher level of debt is needed to compensate for the collapsing revenues. The state's deficit enables a correspondent buildup of money assets for the private sector and prevents
10492-473: The execution of more than 4,900 people. The failed Ardennes Offensive (16 December 1944 – 25 January 1945) was the last major German offensive on the western front, and Soviet forces entered Germany on 27 January. Hitler's refusal to admit defeat and his insistence that the war be fought to the last man led to unnecessary death and destruction in the war's closing months. Through his Justice Minister Otto Georg Thierack , Hitler ordered that anyone who
10614-1075: The failed German offensive at the Battle of Kursk in the summer of 1943. By the end of 1943, the Germans had lost most of their eastern territorial gains. In Egypt, Field Marshal Erwin Rommel 's Afrika Korps were defeated by British forces under Field Marshal Bernard Montgomery in October 1942. The Allies landed in Sicily in July 1943 and were on the Italian peninsula by September. Meanwhile, American and British bomber fleets based in Britain began operations against Germany . Many sorties were intentionally given civilian targets in an effort to destroy German morale. The bombing of aircraft factories as well as Peenemünde Army Research Center , where V-1 and V-2 rockets were being developed and produced, were also deemed particularly important. German aircraft production could not keep pace with losses, and without air cover
10736-668: The future. Food supplies were precarious; production dropped in most of Europe. Famine was experienced in many occupied countries. Hitler's peace overtures to the new British Prime Minister Winston Churchill were rejected in July 1940. Grand Admiral Erich Raeder had advised Hitler in June that air superiority was a pre-condition for a successful invasion of Britain , so Hitler ordered a series of aerial attacks on Royal Air Force (RAF) airbases and radar stations, as well as nightly air raids on British cities, including London , Plymouth , and Coventry . The German Luftwaffe failed to defeat
10858-423: The gold standard. Some Post-Keynesian economists argue that deficit spending is necessary, either to create the money supply (Chartalism) or to satisfy demand for savings in excess of what can be satisfied by private investment. Chartalists argue that deficit spending is logically necessary because, in their view, fiat money is created by deficit spending: fiat money cannot be collected in taxes before it
10980-402: The high unemployment of 1960, but these were instituted only in 1964 and impacted the economy only in 1965 or 1966 and the increased debt encouraged inflation, reinforcing the effect of Vietnam war deficit spending. Structural and cyclical deficits are two components of deficit spending. These terms are especially applied to public sector spending which contributes to the budget balance of
11102-460: The highest law. The government was not a coordinated, cooperating body, but rather a collection of factions struggling to amass power. In the midst of the Great Depression , the Nazis restored economic stability and ended mass unemployment using heavy military spending. Financed by deficit spending , the regime undertook extensive public works projects, including the Autobahnen (motorways) and
11224-502: The implied discretionary fiscal stance of the government, that is, a structural deficit would be an expansionary fiscal stance that promotes at least nominal economic growth. Where deficits are being funded by borrowing, a structural deficit is seen by some economists as an issue for a government as even at the high points of the business cycle the government may need to continue to borrow and thus continue to accumulate debt . According to them, this would lead to continued "deterioration" of
11346-437: The level of (i) public debt, (ii) private sector net worth, (iii) debt service (interest payments), and (iv) interest rates. (See Crowding out below.) Deficit spending may, however, be consistent with public debt remaining stable as a proportion of GDP , depending on the level of GDP growth. The opposite of a budget deficit is a budget surplus ; in this case, tax revenues exceed government purchases and transfer payments. For
11468-424: The like to rise. This accelerator effect stimulates demand further and encourages rising employment. Similarly, running a government surplus or reducing its deficit reduces consumer and business spending and raises unemployment. This can lower the inflation rate. Any use of the government deficit to steer the macro-economy is called fiscal policy . A deficit does not simply stimulate demand. If private investment
11590-474: The manner of a household budget. Continuing in this vein, Chartalists argue that a structural deficit is necessary for monetary expansion in an expanding economy: if the economy grows, the money supply should as well, which should be accomplished by government deficit spending. Private sector savings are equal to government sector deficits, to the penny. In the absence of sufficient deficit spending, money supply can increase by increasing financial leverage in
11712-478: The need for Germany to secure its frontiers. Schuschnigg scheduled a plebiscite regarding Austrian independence for 13 March, but Hitler sent an ultimatum to Schuschnigg on 11 March demanding that he hand over all power to the Austrian Nazi Party or face an invasion. German troops entered Austria the next day, to be greeted with enthusiasm by the populace. The Republic of Czechoslovakia was home to
11834-494: The overall economy of a country. The total budget deficit, or headline deficit, is equal to the sum of the structural deficit and the cyclical deficit (or surplus/es). A cyclical (temporary) deficit is a deficit that is related to the business or economic cycle . The business cycle is the period of time it takes for an economy to move from expansion to contraction , until it begins to expand again. This cycle can last anywhere from several months to many years, and does not follow
11956-497: The plan, as Germany was not yet ready for war. The crisis led to war preparations by Britain, Czechoslovakia, and France (Czechoslovakia's ally). Attempting to avoid war, British Prime Minister Neville Chamberlain arranged a series of meetings, the result of which was the Munich Agreement , signed on 29 September 1938. The Czechoslovak government was forced to accept the Sudetenland's annexation into Germany. Chamberlain
12078-606: The provisions of the Reichstag Fire Decree to keep several Social Democratic deputies from attending, and the Communists had already been banned. The Enabling Act would subsequently serve as the legal foundation for the dictatorship the Nazis established. On 10 May, the government seized the assets of the Social Democrats, and they were banned on 22 June. On 21 June, the SA raided the offices of
12200-434: The public sector to be in deficit implies that the private sector (domestic and foreign) is in surplus. An increase in public indebtedness must necessarily therefore correspond to an equal decrease in private sector net indebtedness. In other words, deficit spending permits the private sector to accumulate net worth. On average, through the economic cycle, most governments have tended to run budget deficits, as can be seen from
12322-408: The real heritage left to the future. This is in addition to whatever public investment takes place in infrastructure, education, research, and the like. Larger deficits, sufficient to recycle savings out of a growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity. Deficits in excess of a gap growing as
12444-469: The same name This set index article includes a list of related items that share the same name (or similar names). If an internal link incorrectly led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Vienna_Award&oldid=1253065549 " Category : Set index articles Hidden categories: Articles with short description Short description
12566-460: The stock market in the United States crashed in 1929 , the effect in Germany was dire. Millions were thrown out of work and several major banks collapsed. Hitler and the Nazis prepared to take advantage of the emergency to gain support for their party. They promised to strengthen the economy and provide jobs. Many voters decided the Nazi Party was capable of restoring order, quelling civil unrest, and improving Germany's international reputation. After
12688-413: The structural deficit will worsen. A government may also knowingly plan the budget to be in deficit in order to sustain the country's standard of living and continue its obligations to the citizens, although this would generally be an indication of poor economic management. Ongoing planned structural deficits may eventually lead to a crisis of confidence in investors regarding the country's ability to pay
12810-461: The supply graph , an increase in government spending will lead to inflation without affecting unemployment. There must also be enough money circulating in the system to allow inflation to persist, so that inflation depends on monetary policy . Many economists believe government deficits influence the economy through the loanable funds market , whose existence Chartalists and other Post-Keynesians dispute. Government borrowing in this market increases
12932-408: The supply of loanable funds, lowering interest rates. Thus, crowding out is a problem only when the economy is already close to full employment (say, at about 4% unemployment) and the scope for increasing income and saving is blocked by resource constraints ( potential output ). Despite a government debt that exceeded GDP in 1945, the U.S. saw the long prosperity of the 1950s and 1960s. The growth of
13054-452: The term "crowding out" they are referring to the government spending using up financial and other resources that would otherwise be used by private enterprise. However, some commentators use "crowding out" to refer to government providing a service or good that would otherwise be a business opportunity for private industry. National government deficits may be intentional, a result of policy decisions, or unintentional. When an economy goes into
13176-529: The total German war dead range from 5.5 to 6.9 million persons. A study by German historian Rüdiger Overmans puts the number of German military dead and missing at 5.3 million, including 900,000 men conscripted from outside of Germany's 1937 borders. Richard Overy estimated in 2014 that about 353,000 civilians were killed in Allied air raids. Other civilian deaths include 300,000 Germans (including Jews) who were victims of Nazi political, racial, and religious persecution and 200,000 who were murdered in
13298-463: The use of automatic stabilization over active or discretionary use of deficits to fight mild recessions (or surpluses to combat inflation). Active policy-making takes too long for politicians to institute and too long to affect the economy. Often, the medicine ends up affecting the economy only after its disease has been cured, leaving the economy with side-effects such as inflation. For example, President John F. Kennedy proposed tax cuts in response to
13420-421: The use of police powers, and by taking control of the state and federal institutions. The first major Nazi concentration camp , initially for political prisoners, was opened at Dachau in 1933. Hundreds of camps of varying size and function were created by the end of the war. Beginning in April 1933, scores of measures defining the status of Jews and their rights were instituted. These measures culminated in
13542-494: The war drew to a close. Suicide rates in Germany increased, particularly in areas where the Red Army was advancing. Among soldiers and party personnel, suicide was often deemed an honourable and heroic alternative to surrender. First-hand accounts and propaganda about the uncivilised behaviour of the advancing Soviet troops caused panic among civilians on the Eastern Front, especially women, who feared being raped. More than
13664-482: Was Ukrainian-American economist Abba P. Lerner , who founded the school of Neo-Chartalism , and advocated deficit spending in his theory of functional finance . A contemporary center of Neo-Chartalism is the Kansas City School of economics. Chartalists, like other Keynesians, accept the paradox of thrift , which argues that identifying behavior of individual households and the nation as a whole commits
13786-494: Was a powerful ally, the relationship was distant, with little co-ordination or co-operation. For example, Germany refused to share their formula for synthetic oil from coal until late in the war. Germany invaded Poland and captured the Free City of Danzig on 1 September 1939, beginning World War II in Europe. Honouring their treaty obligations, Britain and France declared war on Germany two days later. Poland fell quickly, as
13908-562: Was conquered by the Soviet Union from the east and the other Allies from the west, and capitulated on 8 May 1945. Hitler's refusal to admit defeat led to massive destruction of German infrastructure and additional war-related deaths in the closing months of the war. The Allies initiated a policy of denazification and put many of the surviving Nazi leadership on trial for war crimes at the Nuremberg trials . Common English terms for
14030-417: Was dropped. Germany was now a totalitarian state with Hitler at its head. As head of state, Hitler became Supreme Commander of the armed forces. The new law provided an altered loyalty oath for servicemen so that they affirmed loyalty to Hitler personally rather than the office of supreme commander or the state. On 19 August, the merger of the presidency with the chancellorship was approved by 90 per cent of
14152-641: Was good, and food supplies remained adequate in Western Europe. Germany and Europe as a whole were almost totally dependent on foreign oil imports. In an attempt to resolve the shortage, in June 1942 Germany launched Fall Blau ("Case Blue"), an offensive against the Caucasian oilfields. The Red Army launched a counter-offensive on 19 November and encircled the Axis forces, who were trapped in Stalingrad on 23 November. Göring assured Hitler that
14274-526: Was greeted with cheers when he landed in London, saying the agreement brought "peace for our time". Austrian and Czech foreign exchange reserves were seized by the Nazis, as were stockpiles of raw materials such as metals and completed goods such as weaponry and aircraft, which were shipped to Germany. The Reichswerke Hermann Göring industrial conglomerate took control of steel and coal production facilities in both countries. In January 1934, Germany signed
14396-497: Was in violation of the Versailles Treaty. On 17 May 1933, Hitler gave a speech before the Reichstag outlining his desire for world peace and accepted an offer from American President Franklin D. Roosevelt for military disarmament, provided the other nations of Europe did the same. When the other European powers failed to accept this offer, Hitler pulled Germany out of the World Disarmament Conference and
14518-432: Was not prepared to fight should be court-martialed, and thousands of people were executed. In many areas, people surrendered to the approaching Allies in spite of exhortations of local leaders to continue to fight. Hitler ordered the destruction of transport, bridges, industries, and other infrastructure—a scorched earth decree—but Armaments Minister Albert Speer prevented this order from being fully carried out. During
14640-489: Was succeeded by Grand Admiral Karl Dönitz as Reich President and Goebbels as Reich Chancellor. Goebbels and his wife Magda committed suicide the next day after murdering their six children . Between 4 and 8 May 1945, most of the remaining German armed forces unconditionally surrendered. The German Instrument of Surrender was signed 8 May, marking the end of the Nazi regime and the end of World War II in Europe . Popular support for Hitler almost completely disappeared as
14762-545: Was the dominant position until the Great Depression, associated with the gold standard and expressed in the now outdated Treasury View that government fiscal policy is ineffective. The usual argument against deficit spending is the Government-Household analogy : households should not run deficits—one should have money before one spends it, from prudence—and that what is correct for a household
14884-682: Was the fourth nation to join the Axis, signing the Tripartite Pact on 27 September 1940. Bulgaria signed the pact on 17 November. German efforts to secure oil included negotiating a supply from their new ally, Romania , who signed the Pact on 23 November, alongside the Slovak Republic. By late 1942, there were 24 divisions from Romania on the Eastern Front, 10 from Italy, and 10 from Hungary. Germany assumed full control in France in 1942, Italy in 1943, and Hungary in 1944. Although Japan
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