At the risk of invoking Godwin, I have to say that this frighteningly reminiscent of the stories that Milton Mayer details in his 1955 book "The Thought They Were Free: The German's 1933-45" .
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Other than the fact that the Jews were living there as legal citizens, not illegal immigrants.
I'm sorry, I should have been more clear. The parallels that I see are related to the institutionalization of neighbor spying on neighbor. All that's missing are sanctioned and codified Blockleiters.