ABSTRACT
Beginning in the late 1950s, politicians, scholars and the general public intensely discussed what role the state should play in economics and society. These debates were framed by an international context that included the 'liberal consensus' in the United States of America, the Planification in France, the initiatives of the Labour government in Great Britain, and first attempts to harmonize economic and fiscal policies in the European Economic Community. Fiscal policy had delivered the required instruments as well as the necessary legitimization for a more decided break with the ideal of a balanced budget, which also rested on the willingness to take on more debts. Over the long term, however, 'debt illusion' dissolved as the growing mountain of debts limited financial manoeuvrability at the federal, state and local levels. To find the decisions which led to the present fiscal problems of the Federal Republic of Germany, one must first examine the 1960s and 1970s.
