That came with Turkey and the European Union - especially Germany with a Turkish community of hundreds of thousands - in hostilities ahead of an April 16 referendum about expanding Erdogan's powers.
Erdogan made the remark about Merkel after authorities in Germany refused to allow Turkish ministers to campaign there.
A Merkel spokeswoman said "Nazi comparisons are unacceptable in any form."
And a foreign ministry spokesman said Berlin would not fire up support for Erdogan by arguing with him.
Martin Schaefer asked: "Who would benefit if we paid back in kind - if we answered using the same language as the Turkish president?"
His answer: "Mostly the Turkish president who ... with threats, insults and more is seeking majorities of Turkish citizens in Turkey and ... in Germany [in] the referendum."
Germany could handle insults, he said, but "we are not defenseless or stupid or naive, and if pushed too far we'll react."