Bingo!

Well, for once Krugman hits the nail on the head.  Thank you very much.

This does not say that there’s nothing policy can do. On the contrary, debt-deleveraging models say that fiscal policy can help bridge the gap while households pay down debts, and that debt relief — either directly or via inflation that erodes the real value of debt, can make a big difference. [emphasis added]

 What we are talking about here is default on debt.  The question is this: are you or are you not going to pay your debts?  This is true of governments as well.  Something that Krugman isn't concerned about.