This paper discusses economics effects of public policy in Japan by investigating recent attempts on fiscal structural reform, social security reform and tax reform. This paper emphasizes the economic constraints such as credibility, rational expectation, crowding out and commitment on various agents including consumers, firms and governments. I consider the political aspect of fiscal reconstruction movements in Japan, and investigate the behavior of government's control on debt issuance and its effect on the real activities of private agents. I also discuss benefits and costs of fiscal reconstruction and desirable debt management policy. Since Japan is an aging country, it is important to investigate social security reforms from the viewpoint of intergenerational conflicts. Finally. I explain Japan’s tax structure and investigate desirable tax reform to attain successful fiscal reconstruction and economic growth. Especially. Japan’s fiscal policy in 1990s created a problem of a tendency to postpone structural reforms. During the Obuchi and Mori administrations in the late 1990s. structural reforms were put on the back burner for three reasons. The first was that everyone expected that things would get better even before such hard-hitting measures were implemented. Structural measures that would reduce the budget deficit were put off in the hope that the deficit would begin to shrink once the Japanese economy recovered. The second reason was that scandals swirling around the Ministry of Finance and the Bank of Japan in 1990s undermined public confidence in the central government and the ruling political parties. Even if policymakers were correctly informed about the merits of reform, the voting public was unable to share that information and therefore could not properly evaluate their policies. Third, fiscal consolidation and other structural reforms were put off because of short-term benefits needed by the coalition governments. Finally, lobbying activities of local interest groups were exaggerated.