This novel is a lot to make sense of, obviously, but by prioritizing the real historical effects of Nazi Germany, the novel can be brought into focus. It isn't just Nazi Germany in question either, but human evil, the idea to which the Nazis usually refer in literature for reasons that are hopefully very obvious to everyone. What are the damages done by evil in this novel? There are several, and in the novel, these damages are evident even when it isn't explained that they are connected, so what the novel is at least in part is a compendium of all the ways human evil harms us.
It harms our ability to grow up into happy, healthy, intellectually curious adults. By enduring horrifying suffering, the characters in this novel are systematically removed from health by Nazis. Never mind the fact that the narrator admits that his sanity is not quite what it should be—but even if he is being strictly delusional, the abstract meaning of his account will be true—he feels that he is crazy because people have been chronically evil to him, which is something many characters in the novel portray as well.
The relationships between the characters are also damaged, and they are forced into competition and distrust by a kind of emotional scarcity. Because of the ubiquity of human evil and suffering, these pockets of suffering communities experience scarcity of serotonin en masse. When the whole down is depressed and traumatized, when the whole nation has PTSD about the same thing at the same time, then the entire society begins to feel strained and unhealthy. That is the picture of brokenness that the novel offers.