"issuing debt is a way to pay for useful things"
And that is absolutely true.
However, he, through the rest of the article, absolutely ignores the elephant in the room:
Issuing debt (or accepting debt) should be the absolute last resort and one that demands operating efficiently before and after taking-on debt.
Taking on debt to pay for billion dollar websites (pick a number, anything north of low 10^6 is obscene), stupid wars, nation building and, to lump it all together, government waste, is not just wrong, it's dumb and irresponsible. Plug the leaks first before borrowing money to buy more water.
To put it in HN terms, it's like taking VC money and utterly wasting a huge chunk of it by throwing parties, buying boats, giving out exorbitant salaries and, rather than doing the work in-house for a reasonable cost, outsourcing all of the coding to really bad coders who proceed to burn all the VC money you got. And then, after that, you go out to raise more money (more debt, in the context of the national discussion) and justify it by claiming it is "to pay for useful things".
I would be blown away if anyone would look at such a hypothetical scenario and concluded this was a good way to run your life, startup, business or the nation. In fact, it goes without saying that no VC would give money (for equity or a loan) to a group who proved to be irresponsible about the utilization of funds prior to their request for further funding. In other words, in the real world this would not happen because nobody would give such fools a dime. Let's ignore the age of "irrational exuberance", during which the earth's poles might as well have been inverted.
When you add that metric to the question of debt being good or not --whether it is in a personal, entrepreneurial or national context-- the answer has to be very different from Krugman's:
Yes, debt is good provided it is well justified and the person, organization or nation make smart decisions and efficient use of capital.
Case in point: California's ridiculous high speed train. I don't think I need to explain that further. If you live in California and are aware of what's going on you should be horrified of the waste and lack of common sense being exhibited.
I like the article, but I wish it weren't so one-sided by means of excluding a very important side of the financial equation which is a metric representing the efficiency of the organization and the use of capital. I have no clue how wasteful our governments are (from local to federal). I would not be surprised if the number is somewhere between 35% and 65%. That they are wasteful is absolutely uncontested fact. It's only a matter of the degree. And it is going to be a large number.