Walter Kranz, Volker Spengler, a once-prominent poet of the revolution, and his wife Luise, Helen Vita, live with Walter's brother Ernst, Volker Spengler, who is mentally disabled. They face severe money problems: the once celebrated poet’s bank account is overdrawn, his publisher refuses to grant an advance, and debts pile up with friends Lisa and Rolf. One of Walter's mistresses, Irmgard von Witzleben, Katherina Buchhammer, even writes him a check, but he shoots her while roleplaying with a gun.
Walter hatches the idea to write about a prostitute and begins to interview Lana von Meyerbeer, Y Sa Lo, yet the encounter quickly turns physical as he has sex with her. Luise watches and lights up with a sharp reminder that he has not slept with her in seventeen days. Meanwhile, Ernst increases his odd collection, gathering dead flies. A policeman arrives to ask for Walter's alibi regarding Irmgard's alleged murder, while movers come to repossess his furniture. Walter then visits his lover Lisa, whose husband seems untroubled by the arrangement, and Lisa agrees to provide an alibi.
In a bid to secure funds, Walter summons his admirer Andrée, Margit Carstensen, who has been writing to him for years. She moves in with Walter, Luise, and Ernst, and willingly places all her savings at his disposal. Andrée remains devoted to Walter and endures repeated humiliations; she even endures a coerced act in the coal cellar when Ernst acts on Walter's suggestion. Walter writes a new poem, prompting Luise to realize that he has plagiarized from Stefan George. With Andrée’s money, he buys a tailored suit, dons a wig, and begins to read his works to a small, enthusiastic circle of followers.
When Andrée’s funds dry up, the audience disperses as well, because Walter had been paying them to attend his readings. Excluding Andrée, his only remaining disciple is Urs, Vitus Zeplichal, who promises to bring his brother. Luise points out that Stefan George was homosexual, and Walter impulsively goes cruising in a men’s toilet. He encounters a gigolo but cannot go through with sex, and the prostitute cannot assist with his readings either. Walter eventually declares Stefan George dead.
The lack of money drives him to visit his aging parents, whom he cons out of their meager funeral savings. Andrée, who follows him closely, is stunned to learn that his parents are not as wealthy or cultured as he pretended.
Soon, Walter’s creative crisis subsides: he begins writing again and reads to Andrée and his two remaining disciples. Yet money remains tight, and he heads to Lana’s apartment again, only to discover she is married. He employs blackmail to squeeze her savings from her. Lana’s protectors later beat him in front of Andrée, who interprets his smile as weakness and renounces her belief in him.
Walter finishes his book No Celebration for the Führer's Dead Dog, and the publisher approves, calling it “no more cramped left kitsch,” but acknowledging its power and size. He returns home to find Luise hospitalized; throughout this, he has not heeded her concerns about her health. He arrives at the hospital with the two surviving disciples, only to learn Luise has died. He collapses theatrically, disappointing the followers who depend on his strength.
He tells the doctor that everything is acting. The doctor, hearing about Walter’s new work, calls him lucky. Walter then phones the police and accuses Ernst of Irmgard’s murder; Ernst overhears and shoots Walter with a real gun. Walter collapses to the floor. The policeman arrives with Irmgard, who had only pretended to be dead. The gun turns out to shoot blanks. Irmgard douses Walter with a bucket of water and helps him stand. Confused, Walter asks, "Is this paradise?" The policeman and Irmgard laugh, and Walter joins in once the joke lands.
