Cuando la alarma no suena

Many Spaniards vacationed this summer with part of their minds on the alarm that remained activated at home. It is not the vacation alarm, nor the fire alarm, nor the one that should have warned about the flood of people in Ceuta. Nor is it the alarm of our failing educational system. There is another alarm that is not sounding: the alarm of public debt.

It seems like a technical issue, but it is the answer to a simple question: what part of what is spent today will be paid by those who have not yet received their first paycheck? Mike Mullen, the highest-ranking United States military officer, once defined public debt as "the most significant threat to our national security." In Washington, the alarm is starting to ring, but not here yet.

This could be even more dangerous. Stanley Druckenmiller, who has managed hedge funds for 30 years without a losing year, recently wrote in the WSJ against the repurchase of Treasury bonds by the state. It is like the state buying its own debt, so that the price does not reflect what is happening. Lowering the volume of the alarm instead of extinguishing the fire.

According to Druckenmiller, "democracies only heal their finances when the political cost of raising long-term debt becomes greater than the political cost of touching public spending." In Spain, that political cost is currently zero: the market lends almost as cheaply as Germany, with a risk premium at its lowest since 2009. Good news, and anesthesia.

An alarm that does not sound does not wake anyone. Spain has increased its debt by €600 billion since 2018. In the first six months of 2026, the state transferred €32.953 billion to the Social Security system, 10.7% more than a year prior. And this happens during the best employment moment in our history, with more people employed and contributing more: between taxes and contributions, the state already takes more than 40% of the cost of an average salary.

Yet the gap widens. In May, the AIReF certified that pension spending complies with the fiscal rule until 2050. And warned that, without changes, debt will reach 123% of GDP - where the United States is today. Meeting the rule and being unsustainable are not incompatible: it just means the rule measures something different. Druckenmiller calls this "intergenerational theft": benefits taken today and paid for by those who have not yet entered the workforce.

That future payer barely votes: young people aged 20 are one of every five Spaniards and vote less than anyone else. They face a larger, more numerous, and more politically active block. A system that responds to incentives does exactly this. The alarm is not that it does not sound: it is designed not to sound. Spain entered 2026 with budgets extended for the third year: spending is no longer voted on.

To balance the books would require over six million new contributors, and there are many willing to come. But a contribution is not a person: it is a salary, and six million in lower brackets do not sustain what higher brackets would. Those who contribute also pay: each new worker adds another pension within 30 years. Immigration postpones the bill and enlarges it.

The same flood appears in the evening news as a problem and in the pension calculation as a solution. Both readings fail by the same reason: they count people when what decides is how much a work hour is worth. And that value is not set by a decree or an ordinance. Only productivity grows income per capita sustainably, and Spain lags behind the rest of the euro.

Between 1996 and 2019, productivity per hour grew here by 0.6% annually, half the EU's rate; since 2022 it has improved, but 62% of Spain's GDP per capita growth over three decades comes from putting more people to work. At the rate of improvement since 2013, the Bank of Spain estimates the gap with Europe will not close until 2050.

There is only one source of income that cannot be taken away from anyone. Cutting benefits is dividing a smaller pie; raising taxes is changing hands for the same slice. Making each hour more valuable is the only one of the three that makes the pie larger. And it is the slowest, the one that is not urgent because it does not fit into an electoral cycle.

It is called innovation, company size, worker capital, management quality. But it does not make the headlines. Or we plan solutions gradually, protecting those who truly need it, or they will be imposed by the bond market, abruptly and on its terms. Those with Greek friends should ask how they fared. Mark Carney, former Canadian Prime Minister and former Governor of the Bank of England, summarized it as: "Markets sometimes ignore the fundamentals and suddenly put all their focus on them.

If you don't have your house in order, it's too late." The house can still be ordered. It just needs the decision to do it with time and choosing who to protect, or waiting for the alarm to sound - because it will - when it is too late.