Cook macaroni in about 2 quarts boiling water just until tender to bite, 6 to 8 minutes. Drain.

Meanwhile, tear bread into 1/2-inch chunks. In a food processor or blender, combine, bread, parmesan cheese and 1/4 teaspoon paprika; whirl until mixture is coarse crumbs.

In 5 to 6-quart pan over high heat, frequently stir onion and 2 tablespoons water until onion is limp and begins to brown, about 4 minutes. Stir in flour and remaining 1/2 teaspoon paprika.

Remove onion mixture from heat and blend in milk and broth until smooth, then stir over high heat until sauce boils, about 5 minutes. Remove from heat again, add cheese, and stir until it melts. Add nutmeg, and salt and pepper to taste.

Add macaroni to cheese sauce and mix, then pour into a shallow 2 to 2 1/2-quart casserole. Spinkle with seasoned bread crumbs. Bake in a 450F oven until crumbs are browned, about 3 to 4 minutes.