What Motivates the Left, Love for the Poor or Hatred against the Rich?

Spain’s economy is teetering on collapse, and its journey shows how strict controls on central banks and budget deficits—advocated by some U.S. conservatives—can wreck an economy. Unlike Italy and Greece, Spain did not unravel because Madrid borrowed to finance a welfare state it could not afford. Like the United States in the 2000s, Spain had a real estate boom caused by efforts to encourage home ownership and Northern Europeans seeking vacations and second homes in its warm climate. Much was financed by private foreign investments in Spanish bonds and banks. Tourism and construction boomed, growth was stronger and unemployment lower than most of Europe. Private debt soared but Spain’s government enjoyed budget surpluses.