> generals deciding to treat it as an opportunity for a show of force blowing them up intentionally

Only kinda!

„Hielt man fuer UFOs aus dem All / darum schickte ein General / eine Fliegerstaffel hinterher“ They believed that the balloons were unidentified flying objects from outer space. The general panicked and sent a squadron to investigate.

„Dabei waren dort am Horizont nur 99 Luftballons“ However, what they found were only 99 balloons.

Still, there was a problem: „99 Duesenflieger / jeder war ein grosser Krieger / hielten sich fuer Captain Kirk“ The pilots of those jet fighters thought of themselves as warriors on par with Captain Kirk (which is funny; Starfleet is primarily a scientific organization that only incidentally wields weapons).

The neighboring countries concurred: „Die Nachbarn haben nichts gerafft / und fuelten sich gleich angemacht“ They weren't able to suss out anything about these activities and felt provoked by them.

Here's where the war ministers make a show of force though: „99 Kriegsminister / Streichholz und Benzinkanister / hielten sich fuer schlaue Leute / witterten schon fette Beute / riefen Krieg und wollten Macht“ The war ministers brought a proverbial match and gas can to the whole affair. They thought themselves shrewd and crafty and could smell the scent of prey, so they called for war.

„Mann, wer haette das gedacht / dass es einmal soweit kommt / wegen 99 Luftballons“ Man, who could've thought that it came this far because of 99 balloons?

> 99LB was more popular even in the english speaking world

This song predates me by just a handful of years, so I never caught it during its radio heyday, but I can't verify this assertion from personal experience. Perhaps this is a UK-centric view? I'm unsure that much of this kind of cultural exchange made it to the US.