In the article before, it was told how 39 out of 79 economists in the UK are worried about the UK’s fiscal deficit

But now see that from another point of view. Forty out of 79 economists are not worried about the fiscal deficit.

In the US, Paul Krugman, the winner of the Nobel Memorial Prize for Economics a couple of years ago, reckons the answer to our big problem is spending. Spend, spend, spend, he says.

As for the argument that the government can’t afford its debt, he says don’t be daft. The whole reason why the economy is in a mess is because too many investors want to put their money within the warm embrace of Uncle Sam. Risk aversion caused the economic crisis, and risk aversion means money flowing into government bonds.

 When Gordon Brown saved the banks, Krugman used his column in the New York Times to headline: “Has Gordon Brown saved the world?”

 Krugman is a Brown-loving, Keynes-loving, fan of spending.

He worries that once the Fed starts reversing its monetary easing, the US will fall back into recession. “It is not a low probability event,” he told Bloomberg, it’s a “30 to 40 per cent chance.” He added “The chance that we will have growth slowing enough that unemployment ticks up again I would say is better than even.”

There are those who fear that as the Bank of England reverses quantitative easing (QE), all of a sudden the government will find there just aren’t enough takers for its debt.

On the other hand, Capital Economics has argued that should QE start going backwards, then the casualty may be equities, and investors will rush for the safety of government bonds. So there will be no problem funding government debt.

 Capital Economics said yesterday “Equities are expected by many to continue to outperform bonds this year as the US economy slowly recovers, inflation gathers steam and the country’s sovereign credit rating comes under fire. We disagree and expect the stock market to end 2010 lower than it is now and for the yield on 10-year Treasuries to head back down to 2.5 per cent.”

John Higgins from the economic consultancy said: “The chances of a sovereign default happening in the US remain very slim. It should also be remembered that the circumstances that have led to deterioration in the public finances are the same as those that have led to a backdrop of ultra-low interest rates and falling inflation.”

Okay, the UK is not America. Uncle Sam has greater reach than Britain. But, on the other hand, the UK’s net public debt is lower than in the US.

The UK’s position is also helped by the fact that much of its debt is funded by long-term bonds.

According to research from Roubini Global Economics, US public attitudes today and attitudes in the 1930s are very similar. Back in the 1930s, the public became more and more anxious over the levels of government debt, and about the dangers of credit inflation. In response to these fears the Fed increased bank reserves requirements – meaning it effectively reduced the banks’ capacity to take risks. At the same time Congress responded to public fears by slashing spending. The consequence: the depression got deeper.

And yet the Second World War saw an even more extreme version of government borrowing, but instead of the US economy falling apart once the war was over, it went on to enjoy its best ever period of economic growth.

The reality is complicated.

Of course there is a danger the UK will suffocate behind massive levels of debt. It would be easy to join the long list of commentators and predict nothing but woe.

But the biggest danger is that we talk ourselves into this debt crisis. Public and media fears are such that we are in danger of producing a self-fulfilling prophecy.

Remember, for every creditor there is a debtor. Planet Earth can’t go bankrupt (at least not in the sense we are discussing at the moment, the environmental lobby might argue differently, but that is a separate issue).  Here is another fact. Productivity per person in the West is much higher than in China   The main reason why China is growing so fast is simply because it has got a lot of catching up to do.

Global capacity has risen dramatically in recent years. There are reasons to think this will continue.

It is just odd, plain odd, that in an economic environment in which productivity is growing, global capacity is rising and technology is pushing up the potential to increase productivity by even more, we talk about economic Armageddon.