Abstract
Abstract Public debt is one of the controversial and therefore most exciting subjects in the field of public finance. Since the 1970s many industrial countries constantly accumulated public dept, and this development was explained mainly from a public choice perspective. In the meantime the trend has reversed. Therefore the paper pursues the question whether this change in the borrowing behavior of government can also be explained from a public choice view. For this purpose and with special focus on Germany, first, the fading away of fiscal illusion is considered, induced by the learning processes which the citizens have undergone in the meantime. In addition, changes in political ideologies and institutions are analyzed as well as the fiscal constraints which result from a permanent high governmental debt. It is argued that the sum of these factors is responsible for the fact that politicians do not pursue their previous fiscal behavior any longer and instead revert to a strategy of budget consolidation.
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