Jeremy Warner at the UK Telegraph has never been a particular fan of Paul Krugman  – “Nobel prizewinner and NYT columnist” (love how Warner makes that read as a put down…) but Obama’s pet economist has taken a step too far.

Not content with being the patron saint of the Pelosi/Reid/Obama deficit he has now turned his gimlet eye eastwards across the ocean and reeled back in horror at our coalition governments deficit reduction plan.

premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it

In fact Chancellor Osborne’s plan turned out to be a little less draconian than expected. Nevertheless over the next five years government departments have been told to reduce spending by 19% and a fair number of public sector jobs will be axed. The aim is fairly simple

To eliminate the structural deficit by balancing the cyclically-adjusted current budget over five years, by 2015-16. The coalition government have set a target of national debt falling as a proportion of national income by that same year – but will aim to do this one year earlier, by 2014-15.

As Warner points out Krugman is correct when he reminds us that in historical terms our UK public debt is not at a historical high. What he fails to reveal, however, is that those highs have almost always been at times of intense military struggle – the Napoleonic wars, the Boer war and, of course, the two world wars.

At the end of the nineteenth century Britain was still one of the world’s economic super powers. Germany and the USA were catching up fast but it is a mistake to assume that our economic decline was inevitable. However the burden of global war meant that victory was purchased at high cost

The big point missed by those who think elevated public debt doesn’t matter is that these periods of excessive debt utterly crippled the UK economy. Indeed, Britain’s decline through the twentieth century as an economic superpower directly correlates with increased indebtedness. Fighting wars is not good for economic health

Today’s massive public debt in both the UK and USA is not caused by excessive military spending. The current conflicts are marginal and, like Britain’s nineteenth century colonial wars, the costs recoverable once the issue is resolved. But if Iraq and Afghanistan were overnight to turn into models of peace and brotherly love the Krugman/Obama deficit would still be there, a baleful presence looming over American society – and for Warner that is indeed a chilling thought.

We cannot rely on demilitarisation to come to the rescue of the public finances, as it has in the past. Public debt is excessive for entirely different reasons – the excess in public spending is not on fighting wars but on treating ourselves – and unless America does something about it soon, the US will decline economically and geo-politically over the next fifty years as surely as Britain did in the last century.

Cameron, Osborne and even their Liberal Democrat coalition partners have grasped this cold hard fact and have bitten on the bullet. So indeed has Merkel and even Sarkozy.

Which leaves Krugman and his deficit denying pupils in Washington dancing America in the other direction looking for rainbows and unicorns.  But nothing will be found except the city in the valley of darkness and the gentle but inevitable disintegration of a once great nation.

And the grandchildren will be paying the price….