Firstly, what does "make the economy poorer in the long run" mean? A fall in GDP? A fall in real wealth? A general fall in prosperity? Or that we'll tend to be poorer than we otherwise would be. Secondly, the crowding out argument is not the sole reason why deficits can reduce prosperity. Another is that deficits need to be paid for, and this typically involves monetising the debt. This leads to expansionary monetary policy that fuels asset bubbles and increases systemic risk. In other words, fiscal imbalances aren't the solution to the credit crunch, the credit crunch is the consequence of fiscal imbalances. Thirdly, he finishes up with:
Who would disagree that the "best course of action... is to... get this economy on the road to recovery"? I dislike the rhetorical ploy of projecting bad intentions on intellectual opponents.
And finally, whilst I'm at it (and this belies the fact that I actually like a lot of what Krugman does), here's Peter Klein:
Paul Krugman is incredibly bright, deserved his Nobel, and inspires many young economists to pursue the discipline. But he is also partisan, uncharitable, and unscholarly. When was the last time you learnt anything from reading him?