With the current economic crisis, the majority of the population has lost purchasing power because of declining salaries and net worth throughout the country. Still, it seems like the national government has not acknowledged this hard reality. Public spending during the crisis rose 8.8% and now represents 47.8% of GDP.
Winston Churchill once said that a politician need always be prudent. We are spending nearly half of what we produce annually, which is hardly prudent, especially since some of the money being spent comes from taxpayers. It is true that Zapatero's government made an effort to restrain the spending, but Rajoy's government has done little to continue this effort despite several reforms and a series of cutbacks to healthcare, education and public services. The overall size of the national government remains too large. Revenues and spending will remain unbalanced for the rest of Rajoy's term in office, because he has made some less than ideal decisions.
We are the eighth largest spender in the euro zone. Obviously, the impact of the economic crisis has something to do with this upturn, but it is not the only factor. Bad spending practices among various areas of government combined with politicians who are unmotivated to build a unified public sector reform package could make Spain lose a golden opportunity to balance the budget.
And half-finished measures will not be worth it. Rajoy has an absolute majority in Parliament, so the government makes things happen when it feels like it. Perhaps this is the right time to take action instead of putting off balancing the budget until the next term.
