Wow.
As always, thanks. Lots of work there, Bruce.
A couple things strike me.
First, the superficiality of the CBO study is staggering, obvious and hard to understand. It seems that their whole reason for existence revolves around providing a perspective that avoids such twisted analysis. The twist of omission- inexplicable, rendering their work here of little use.
How did the Downing Street memo guy put it? "The facts were skewed to fit the intelligence", or something like that?
Second, Krugman is at war with most of the rest of the uncollared economists, as epitomized by Simon Johnson, on the subject of "Too big to fail" banks. He sees no need to break them up- just regulate them adequately.
Johnson, and many others see the very existence of a political force so powerful to be beyond real regulation, potentially destructive to democratic government, or even just any adequate government.
There was a time when Krugman would have seen this right away, I think.  
I think Krugman is seriously wrong twice, and is beginning to look a bit captured himself- by the big "O".

Capitalism searches out the darkest corners of human potential, and mainlines them.