Krugman "won", because his message is easier to take.
Paul is right, but the average viewer will always go with the man selling the snake oil.
It's the same with the guy selling magic diet pills vs. the guy selling diet and exercise. The magic diet pills win, just like big government and more inflation wins over fiscal responsibility. The irony is that the current monetary policy is stealing wealth from the middle class, which makes it a pretty admirable scam.