Spanish doom and gloom

It's that time again when a huge plethora of news stories and statistics seem to all come out at the same time, and most of them have downward pointing arrows. Sales in Spain are down, rental income in Spain is down, and the middle classes in the UK are having more trouble paying off debt than ever before.
It's interesting to wonder about the knock on effect of things as they spiral downwards; People struggling with debt in the UK are finding it more difficult to pay their debts, so may not go on holiday this year, which means that people with overseas property will have less rental income, so will struggle more to finance their holiday homes, which will leave less money to spend in the UK, and make it more difficult to pay debts in the UK.
So that seems to inevitably lead to more repossessions home and abroad, which gives the banks the willies and makes them more reluctant to lend on good terms in the future.

So, even though we seem to have historically low interest rates everywhere, how come so many people are struggling with debt? Is it because over the last few years it was just possible to get more debt to service your existing debt ?
Most people with existing mortgages must have lower payments at the moment, so they must have spare cash to pay towards other credit - no?

The problem is that we have become so used to our economies being driven by what is essentially invented money. It doesn't really exist other than it has supposedly been borrowed centrally by a bank (and guaranteed by their assets worth jack-shit) and then lent to a customer at a higher interest rate, which they have spent somewhere in the economy. At no point does it seem to be real money that you can touch and feel.
What happens to things when all that has gone? I think we are going to find out........

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