It also suggests that the American people can't be trusted.
Now yes, pulling the lever for Bush was a catastrophic thing to do. Anyone who did that was either rich and short-sighted or ignorant and stupid. But if you assume that we can't be trusted with our own governance, well, the whole system falls apart. Once you start down that road you find yourself headed to a very dangerous place. The Democrats have to assume that in the future the American people will make good choices, or at least that there's a chance they will.
Fiscal responsibility is essential at this point in time. We're headed into a very volatile period of history, and owing more to China and Japan will just make things worse. We need to get our house in order. Krugman's arguing that we shouldn't do so because the inbred hill people of Arkansas are going to vote another semi-sentient chimp into the White House has a logical fallacy in it. If the inbred hill people elect another chimp it won't matter what we do. We're fucked.
Democrats need to govern as wisely as possible and hope for the best.