Signs of Dissent: The Debt Crisis Is Haunting the World

Welcome back to The Atlantic's Signs of Dissent Project, where we bring economic context to some of the most provocative signs of the Occupy Wall Street movement. To date, we've used OWS signs to explain the student-loans crisis, the runaway wealth of the top 1%, and the 47 percent of Americans who don't pay federal income taxes, who are targeted in the backlash movement "We Are the 53 Percent." Yesterday, we also documented the globalization of the OWS movement, which sprung up in various forms of protests around the world, including New Zealand, South Korea, Hungary, Mexico, and Canada.

Our next sign comes from the Spanish protests in Madrid, outside Puerta del Sol. The sign reads (translated): "Debt? You owe us everything." The October 15 protests in Madrid and Barcelona were estimated at 200,000 to 500,000 per city, "more, probably, than the protests in the United States combined," Nate Silver reported from the New York Times.

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Spain's story will sound familiar to an American audience. For decades, the government promoted home ownership. As more families moved into houses in the 1990s and 2000s, home prices rose in tandem with household debt. The crunch devastated the housing stock, and nearly a third of Spanish homes now lie empty. The collapse of the real estate industry has cratered the economy, which is now growing at barely one percent a year with the highest jobless rate (above 20 percent!) in the Eurozone ... and probably the entire developed world.

But this is where the stories diverge. Whereas the United States is fortunate to have the faith of bond investors (if not the faith of the public), Spain has seen its borrowing rates creep up. In a move to please investors and the European Central Bank, Madrid adopted austerity measures at the end of 2010, which include tax hikes on the rich, 8% spending cuts, and higher taxes on some consumer items like tobacco. The effect has been to slow the economy, which in turn makes it harder to convince Spain's lenders that the country is worthy of their money. This is the vicious cycle at the heart of the European debt crisis.

It's not  clear whom the sign is addressing (the verb indicates a second-person plural subject): the banks, the Spanish government, the people, or  EU. Strictly speaking, it's hard to imagine who "owes" Spanish homeowners money, since the debt crisis originated in the private sector, whose debts the government assumed. In any case, it reinforces the global theme of the boomerang crisis in the developed world, in which governments have done a better job rescuing the big banks from the brink than restoring the wealth of the middle class.