Krugman is partially right.
The quote of mine that you pulled was in response to Paulson/Bernenke/Bush philosophy in trying to fix this mess. There has been a change in philosophy from the top since that was posted in December.
We do, however have to watch out that we do not move to that result. The Japanese had much higher savings and much lower consumer credit. That provided a decidedly different economic cushion for the eventual crash. They also spent 180% of their GDP in trying to buy their way out of the problem. That would be the equivalent of us spending $27T in direct bailout costs. THAT would cost us a Lost Decade.