Actually paying the private economy the money you already owe them isn't exactly stimulative. I mean, one would hope the private economy already assumes the bonds it has coming due are going to be paid.
Unless you're implying that investors worried that Spain my default before they personally get paid will pump money into Spain's private economy the moment their personal stake is clear. But panicky investors seem like the last people who would throw money into an economy with dodgy prospects.
And in general, the private economy has shown no real desire to do anything with its money other than hand it to stable governments or sit on it, despite very little return in either case.
So even as bonds mature, the money is not going into the private market at appreciable rates. And, in cases like Spain's, it also isn't likely to be handed directly back to the Spanish government keeping rates low.
It's going to either demand higher rates, sustaining the problematic higher rates, or run screaming for safer harbor.
In short, if investors had any intention of spending their money in Spain's private economy, there'd be no crisis. They would already be doing so, GDP prospects wouldn't be so awful and Spain's ability to meet its obligations wouldn't be in such doubt.
Unless you're implying that investors worried that Spain my default before they personally get paid will pump money into Spain's private economy the moment their personal stake is clear. But panicky investors seem like the last people who would throw money into an economy with dodgy prospects.
And in general, the private economy has shown no real desire to do anything with its money other than hand it to stable governments or sit on it, despite very little return in either case.
So even as bonds mature, the money is not going into the private market at appreciable rates. And, in cases like Spain's, it also isn't likely to be handed directly back to the Spanish government keeping rates low.
It's going to either demand higher rates, sustaining the problematic higher rates, or run screaming for safer harbor.
In short, if investors had any intention of spending their money in Spain's private economy, there'd be no crisis. They would already be doing so, GDP prospects wouldn't be so awful and Spain's ability to meet its obligations wouldn't be in such doubt.