Keynes would say that non-productive work is not valueless, because it still stimulates the economy by enabling those diggers to be consumers. Not that I subscribe to the theory, but there are many well-respected experts who do.
I think that if they're intelligent in their austerity, then it'll be this non-productive stuff that gets cut. And what the big-government Keynesians so frequently miss is that the government spending crowds out the private sector. If the government frees up those resources (people, money, etc.), then the private sector can use it to produce something that people want to pay for.
But even if Spain isn't so intelligent in their austerity, well, just because something needs to be done doesn't mean that it's the government that must do it. There will still be every opportunity for private industry, or even Spain's underground economy, to fill in the void.
I think that if they're intelligent in their austerity, then it'll be this non-productive stuff that gets cut. And what the big-government Keynesians so frequently miss is that the government spending crowds out the private sector. If the government frees up those resources (people, money, etc.), then the private sector can use it to produce something that people want to pay for.
But even if Spain isn't so intelligent in their austerity, well, just because something needs to be done doesn't mean that it's the government that must do it. There will still be every opportunity for private industry, or even Spain's underground economy, to fill in the void.