From what I have read of Krugman's commentary on this particular issue, he is trying to claim that he was some sort of prophet, and that had Obama listened to him instead of his unworthy "advisers," the government would have pumped another $400 billion into the economy and that new money magically would have transformed everything. Yes, out of the trillions and trillions of dollars that have been spread around the world since 2008, it all came down to a measly $400 billion.
While it is true that Krugman accurately noted that this downturn would last for a long time, he got his reasoning wrong. The problem is that Krugman, as a Keynesian macro guy, cannot see anything but aggregates, which is not economics at all. There is no such thing as "aggregate demand" and "aggregate supply," or at least something with such terms that can be represented in the crude "Keynesian Cross" or an AD-AS graph.
With the Keynesians, spending is spending, period, and it does not matter where the spending occurs, just as long as someone somewhere is SPENDING. This is the crudest form of analysis, and I can say forthwith that anyone who believes this is not an economist.
In a couple of links, Sheldon Richman explains first why the "stimulus" did not turn around the economy, and, why more "stimulus" money would fail to have made a difference.
Richman understands something that Krugman and his followers do not: that the creation of new money does not create real wealth, but rather serves to transfer wealth:
But it’s more than that. Since the new money gets into some hands rather than others first, monetary expansion — that is, inflation — changes the pattern of prices and production that would have resulted from voluntary exchange under sound money. Among the prices distorted are interest rates. By doing so, inflation transfers resources from those who produce wealth to others.Economies do not grow because government showers them with new money; they grow when people can take existing resources and use them in ways to create more wealth than they did before, or they find new ways to use these resources, often turning them into new kinds of resources. For example, before entrepreneurs found a way to turn crude oil into a useable fuel, kerosene, and to make it widely available at a good price, petroleum was seen as a nuisance, not a resource.
Inflation, therefore, is one more government income-distribution program. The lucky early recipients of the fresh fiat money gain purchasing power — command over scarce resources — at the expense of everyone else.
This is something that I have concluded Krugman and others are incapable of understanding. To these people, entrepreneurs are nothing more than parasites, people who somehow profit at the misery of others. In their minds, the State is the creator of all wealth, period.
Under this kind of thinking, production and consumption are two separate and unrelated things. More production does not enable people to consume more; in the Krugman-Keynesian view, more production actually is bad, because then it means that consumers have to find ways to "buy back" the goods that have been created.
Krugman also confuses consumption, which is purposeful activity, with "spending," which is activity that exists not to satisfy the needs and wants of individuals, but rather is a mechanism to "buy back" that which was produced and to enable producers to make more stuff, and so on.
As I said before, this is not economics. It is the creation of mechanistic models that fail to reflect human action. Unfortunately, it is what dominates the thinking in government and academe and even Wall Street, and as long as policies are being made under such direction, this depression not only will continue, but get worse.