Government spending has a wide range of benefits. Unfortunately once the private debt load get's that high is simply more rational for individuals to default v

Government spending has a wide range of benefits. Unfortunately once the private debt load get's that high is simply more rational for individuals to default vs trying to maintain that debt load. Because of the Euro that private borrowing involved international lenders private defaults help that country in the long term. In which case a deeper recession and some polices that caused more borrowers to default would actually help Spain recover at the cost of it's banking sector. The short term alternative is to prop up it's private sector for a few years in the hope that the world economy improves and they avoid a deep recession at the cost of a crushing public debt load.