This is more than true.

"The government" was to blame for this, entirely. It is "the government", as members, coalitions etc changed, but it had decisive influence on proceedings as we know it.

"Stabbed in the back" was propagated by the very institutions of the Weimar government itself – and several of its members. In a sense, there was such a 'back-stab', but it came from the head of the army, not so much from deteriorating conditions on any front, be that trenches or home front.

Looking at the timeline of events, it becomes clear that not the German socialist revolutionaries in November stabbed anyone military. The real back-stabber was Ludendorff who when he finally panicked on September 28, diagnosed defeat, ordered armistice and revolution from above. That, not the Western Allies through decisive action, broke the spirit and the back of the German army on the Western front when the collapse occurred. These facts were kept from public by the government.

Starting from the centrists like the Social Democrats over to the most extreme far-right, no-one in this spectrum really had an interest in revealing the truth, as they all had reason to see the semi- and fully 'official story' of Jew-communist backstab as beneficial for their own position, prestige and plans for the future.

The Weimar state did publish several volumes of documents circling around these issues, but none of it told the facts as they could have been known by then. From one of those official inquiries by civilian Weimar officials, the lie of "stabbed in the back" was 'officially inaugurated', as Hindenburg presented his explanation unchecked in front of the committee and journalists.

Since the timeline of events in 1918 is really narrated very biased for the first few hits on a search in the English speaking web, we'll need first to establish the view from the other side of the war, the Eastern front.

That is not what happened in the West, as hinted at in Pieter's answer. Even more important for the German public, and those politicians later coming to power, were successes in the East. ^{Omniatlas: Europe 1918: Armistice Day}

It was only the 27th of September 1918 that the Germans stopped their up that point quite successful offensives in the East, that were planned to occupy Petrograd, Murmansk and even open a new Caucasus front against the British.

The propaganda told them that it was a tough fight in the West, but that the troops stood their ground within enemy territory. Despite painting an optimistic picture, it was close to the truth and conveyed "We're still winning", or at least "able to win". And while things started to turn sour in the West the German army got very mobile in the East and submitted vast stretches of land to German control. After the "Brest-Litovsk peace treaty" that sounded even more like success for newspaper readers.

When in reality the situation from seen above after the dies ater of the German army was even for Ludendorff and Hindenburg so dire that this military dictatorship ordered the completely surprised civilians to emulate revolution by transitioning the political system to parliamentarianism and immediately seek an armistice and peace. They argued that it was all lost and that otherwise the Western front would collapse anyway and the army would surely dissolve into revolutionary elements, like in Russia.

Flabbergasted, the previously excluded from information and power civilians did as ordered. After a while Ludendorff changed his mind and advocated for a newly increased resistance, to continue fighting defensively through 1919 and renew offensive operations in 1920.

We know that didn't happen.

But the idea for a 'stab in the back' had many confluences, some starting as early as 1914: In name it was first published in a Swiss newspaper in December 1918, and even attributed to a British general. It was in the newspaper, alright, but the British general didn't acknowledge to have ever said it.

Then Ludendorff wrote in letters from his Swedish exile in defiance of his words and actions from August/September 1918 that this Dolchstoß was the 'real reason' for defeat.

Form the end of 1918 onwards the people's council and then the national assembly of the democratising Germany had some interest in getting to know what really happened.

Obviously, that was needed, as the later Reichspräsident Ebert greeted homecoming troops from Belgium in Berlin as as having done their durty for the fatherland, bravely, and "unbeaten and unconquered".

When the newly formed Weimar Republic was forced to sign the Treaty of Versailles, including the "all blame on Germany for war-guilt" paragraph.

But the politicians that were civilians could not have known from public sources what went on before the war, during the war or at the end. It was secret diplomacy, undemocratic procedures, and intransparency all along.

So the set up an official commission of enquiry.

That was called

Untersuchungsausschuss für die Schuldfragen des Weltkrieges

This was not only to investigate whether Germany was the one to blame for the war, or what events and consequences lead to it, but also who in Germany did what and was to blame for what happened.

This "who started it" sounds like being unrelated to Dolchstoß, but the whole thing suffered from feature creep and was divided into subcommittees.

One should look into "how and why did we lose, suddenly".

Some of the information gleaned there was immediately classified as scrte and top secret, on the insistence of the old imperial bureaucracy, that was of course also the newly 'democratic" civil service.

But some hearings were published swiftly, and most of the work was documented accurately. In quite a tome. And it took a while to finish it. Some of the works should have been published int he 1930s, but a certain governemnt wasn't particularly interested in the contents.

• First series – Prehistory of the World War (Several volumes, last published after the World War. The Second World War!))
• Second Series – Possibilities for Peace during the War (2 volumes)
• Third Series – International Law in the War
• Fourth Series – Die Ursachen des deutschen Zusammenbruchs im Jahre 1918 (The causes of the German collapse in 1918) 12 volumes, published between 1925–1929

This Fourth series is what's alluded to in HDE 226868's answer.

Unfortuneately, it was this very government owned institution that widely publicised the stab-in-the-back legend in the very first place!

It was in front of this committee, that the great war 'hero' Hindenburg was allowed to lie in his "Erklärung des Generalfeldmarschalls von Hindenburg vor dem Parlamentarischen Untersuchungsausschuß ("Dolchstoßlegende"), 18. November 1919".

The legend was publicly "inaugurated", as some historians describe it, by the government itself.

To be fair: It was one of the first accounts to be published in that series and taken as a whole, you'll also find some conflicting information in those twelve books.

Now, which documents could have proven that Germany indeed was defeated on the battlefield and that the front itself, the army, the officers, the soldiers were finished, while the homefront was indeed quite well still?

Public figures, like historian Delbrück analysed on basis of information available to him, that it was a lie, a legend, and "Unsinn".

But

Erich Ludendorff's report to OHL officers on October 1, 1918:
He was obliged to tell us that our military situation was terribly serious. Every day our Western front could be broken through […]
The OHL and the German army were at the end; the war was not only no longer to be won, rather the final defeat was probably inevitably imminent. […]
Unfortunately our own army is already heavily contaminated by the poison of Spartakist-socialist ideas. We can no longer rely on the troops. Since 8 August things have been rapidly going downhill. Continusly, troop units proved so unreliable that they had to be pulled out of the front more quickly. If they were replaced by troops still willing to fight, they would be received with the shout of "strike breakers" and asked to stop fighting. He could not operate with divisions that could no longer be relied upon. Thus it could be foreseen that in the near future the enemy, with the help of the combative Americans, would achieve a great victory, a breakthrough in very great style, then this West Army would lose its last foothold and flood back across the Rhine in full dissolution and would carry the revolution to Germany. This catastrophe must be avoided at all costs […] "But I have asked S[eine] M[ajestät, Kaiser Wilhelm] to now also bring those circles to the government to whom we owe the most that we have come this far. So we will now see these gentlemen moving into the ministries. They are now to make the peace that must now be made. Let them now eat the soup that they have brought to us!
_{Albrecht von Thaer: "Generalstabsdienst an der Front und in der OHL. Aus Briefen und Tagebuchaufzeichnungen 1915‑1919", Göttingen, 1958, p. 234f.}

The deputies learn the truth about the military situation (October 2, 1918).
From the memories of the Vice-Chancellor Friedrich Payer:

In the meeting, with a heavy heart, I told the parliamentarians after a few preparatory words what the Supreme Army Command demanded and informed them of the approximate content of the intended note. They sat in horror, only Count Westarp and Stresemann declared it impossible for us to be in such a desperate situation. I then asked the Major von dem Bussche [representative of the OHL] to enter, and he held the lecture printed in the "documents" […] either verbatim or almost verbatim, as it is printed there. The effect was a convincing one, even me, who knew what it was like, seized the militarily concise and clear summary of the facts once again, which stated that the continuation of the war was to be abandoned as hopeless and that even if the German army could still hold up the enemy for months and achieve local successes, no time should be lost, since every day could worsen the situation and give the enemy the opportunity to clearly recognize our current weakness.
_{Friedrich Payer: "Von Bethmann Hollweg bis Ebert. Erinnerungen und Bilder", Frankfurt, 1923, p 103}

Such documents might have been published at the time, although Ludendorff saw socialist influencers everywhere someone had a different opinion already in that report. Statistics to show that there were strikes at home, but supplies kept flowing. That there was a hidden strike in the military (W Deist) as well and that the enemy was simply winning?

Well telling the population such things would not have been that popular. But perhaps in the name of truth…? A large part of the people would not have wanted to hear that, and simply disbelieve it.

So why really didn't they – the government, the democrats – publish more about the truth?

The question of the guilt for the outbreak, course and outcome of the First World War developed immediately after the end of the war into one of the most pressing problems of the political-social discourse in the Reich - especially against the background of the guilt attributed to the Entente in the Treaty of Versailles, which was perceived as a "lie". To clarify this question, a parliamentary committee of inquiry was formed during the Weimar National Assembly on 21 August 1919 in accordance with Article 34 of the Reich Constitution. It consisted of a general secretariat and four subcommittees, which were composed of members from all parties. The four subcommittees worked on 1. the "Prehistory of the World War", 2. the "Possibilities for Peace during the World War", 3. international law during the World War" and 4. the "Causes of the German collapse in 1918".

The parties pursued different objectives in the committee. The Socialist Left (USPD and later KPD) understood it as a tribunal against the exponents of the old regime. Social Democrats (SPD), the Centre Party, the German Democratic Party (DDP) and the German People's Party (DVP) wanted to "dispassionately" clarify the political decision-making processes and responsibilities of the time. The conservative camp, especially the German Nationalists (DNVP), was in principle against the committee and its objectives. Due to the parity of the members, the latter forces could later gain decisive influence over the committee. This and the often obstructive behaviour of the Reich authorities and the military led to the committee serving primarily as an apologetic foundation for German foreign policy.

In particular, the activities of the Second Subcommittee affected the Holy See. Here in 1921/22 the papal peace initiative of August 1, 1917 was examined. The Curia and Pacelli, on the other hand, had strong reservations, which were divided by the Foreign Office into negotiations on the facilitation of the provisions of the Treaty of Versailles with a view to a possible mediating role for the Vatican. For this reason, the relevant meetings of the Committee were held in camera. Also, unlike the three others, the opinions and decisions and the testimonies of the second subcommittee were not published.

_{Parlamentarischer Untersuchungsausschuss für die Schuldfragen des Ersten Weltkriegs, in: 'Kritische Online-Edition der Nuntiaturberichte Eugenio Pacellis (1917-1929)', Schlagwort Nr. 3032, URL: (Datum 25. Mai 2019) Letzte Änderung: 16. Dezember 2013}

What does that mean for the question as posed?

The German government itself publicised the Dolchstoßlegende, in part because old military and bureaucratic elites – still in office the whole time – wanted it that way and the various new elites made a pact with them. The conservatives were already planning the next world war and could use the legend to bolster the standing of the army and discredit any left-wing or liberal position as 'proven treacherous'.

That is part of the "why". But considering the smear word employed when using the legend or connected conspiracy theories, the government should not have needed the legend anyway, as some data was very publicly available, from the start.

This data is simply dates in relation to Novemberverbrecher (crooks of november, blaming the socialists etc).

Ludendorff informed the politicians on the start of October. The 'revolution' is tied to October-reforms and November 9 in Germany and the armistice in the West is dated 11.11, with quite some turmoil in Germany to follow.

The Armistice of Salonica (also known as the Armistice of Thessalonica) was signed on 29 September 1918 between Bulgaria and the Allied Powers in Thessaloniki.

The Armistice of Mudros, concluded on 30 October 1918, ended the hostilities, at noon the next day, in the Middle Eastern theatre between the Ottoman Empire and the Allies of World War I.

The Armistice of Villa Giusti ended warfare between Italy and Austria-Hungary on the Italian Front during World War I. The armistice was signed on 3 November 1918 in the Villa Giusti, outside Padua in the Veneto, northern Italy, and took effect 24 hours later.

While ever Germany faced ever new allied opponents, its own allies were out, one after the other. And with Austria gone, Southern Germany was practically exposed unprotected to allied intervention.

While most Germans thought the situation at the front was much better than in reality, they all were weary of the war by then, were they soldiers or workers. But some then choose to forget that they had wanted peace. How armistice and Versailles went down did not help in this case. But in light of the information that was available, that the conservatives chose to continue speaking of a 'stab in the back' was really just one thing: utter absurdity.

Possibly.

There is a mention here of "a formal Reichstag commission of enquiry . . . held by the Weimar government." The commission criticized some aspects of the stab in the back theory, but not all of it:

The expression ‘stab-in-the-back’ in the oft-used sense, as if the country had attacked the victorious army in the rear and as if the war had been lost for this reason alone, is not accurate. We succumbed for many reasons.”

The report blamed “a pacifistic, international, anti-military and revolutionary undermining of the army” for the defeat and that this movement “originated at home but the blame does not attach to the entire population, which in four and a half years of war endured superhuman sufferings.”

The report stated that the blame for the situation that the army found itself in should be attached “only to the agitators and corruptors of the people and of the army who for political reasons strove to poison the bravely-fighting forces. One should therefore speak not of a ‘stab-in-the-back’ but of a poisoning of the army.”

The name of the report is not given, but two individuals involved in it were Albrecht Philip and General Hermann von Kuhl. The Wikipedia article on von Kuhl calls the commission the Historical Commission of the Reich Archives. It also quotes him¹ as saying

The German offensive of spring 1918 had to battle with severe challenges... The mobility of the army was limited. Front-line units were gradually exhausted, while the enemy's combat power grew substantially through the arrival of the Americans and through the new means of combat – the tank.

This was the gist of the report: there was little evidence of the German military being "stabbed in the back".

I can find no other mention of the commission anywhere, so I don't know whether or not the results were published at the time. It would have been published at some point - obviously - but I don't know if it was published during the time of the Weimar Republic.

^{1Originally from 1918 – Year of Victory: The End of the Great War and the Shaping of History, edited by Ashley Ekins.}

The difficulty is that, by a suitably chosen narrow meaning of defeat: Destruction of the army in the field, loss of all conquered territory, or significant loss of hoe country areas, the German Army wasn't defeated. Here is a map that shows the Allied March to the Rhine after the Armistice; which thus shows that on Nov 11, 1918, the Germans still held all of Belgium east of the line Ghent-Maubeuge; significant French territory between Longwy and Metz; and all of Alsace-Lorraine.

Given adequate supply, logistical and reinforcement support from the home front, the German General Staff position that the war could have been continued is reasonable.

Of course, we know now that that assumption was invalid; the Allied blockade had had its desired effect, both the German economy and home-front morale were completely broken, and further continuance of the fighting was moot, leading only to an inevitable destiny; but the German army, and particularly its senior commanders, had been sheltered thus far from the privations of the populace.

It is thus a curious paradox, for which I cannot recall any earlier precedent in history, that while the German Nation had been utterly defeated, its Army had, in some sense at least, not been defeated.

Update: from here (my emphasis):

By mid-October Ludendorff and Hindenburg wanted to distance themselves from a negotiated settlement or surrender to Allied demands. Now politically powerless, Ludendorff favored what he could have done better had he not gambled on his offensive and ruined the moral and fighting strength of his troops: he was for fighting on the defensive – through 1919. He and the German admiralty insisted that submarine warfare continue. And on October 20, Hindenburg told Prince Max that his government should keep Germany fighting "for our honor to the very last man," and if this resulted in Germany breaking off negotiations with Wilson, claimed Hindenburg, so be it.