[B]oth [liberal and conservative] sides, I thought, agreed that the government should provide public goods — goods that are nonrival (they benefit everyone) and nonexcludable (there’s no way to restrict the benefits to people who pay.) The classic examples are things like lighthouses and national defense, but there are many others. For example, knowing when a volcano is likely to erupt can save many lives; but there’s no private incentive to spend money on monitoring, since even people who didn’t contribute to maintaining the monitoring system can still benefit from the warning. So that’s the sort of activity that should be undertaken by government.
Part of the problem with Krugman's incredulity on this point is rooted in a thoughtless bleating of Ronald Reagan's infamous "government is the problem" line from his first inaugural address. Reagan didn't actually believe that, nor did he practice that. Yet, far too many conservatives and Republicans believe it so fervently that counter-evidence is dismissed with a casual wave of the fingers.
My guess is Jindal raised this one because, to someone living in Louisiana, monitoring volcanoes sounds kind of weird. As Krugman himself says, "Basically, the political philosophy of the GOP right now seems to consist of snickering at stuff that they think sounds funny." Of course, to someone living in Illinois, monitoring hurricanes sounds kind of weird, but at least I understand why the US does it, and doesn't leave it to market forces to pick up the slack.
It shouldn't take a Nobel Prize-winning economist to explain to the drooling class why the government funds things like rural electrification/broadband access, the TVA, public broadcasting, and on and on. Precisely because these are the same people who refuse to accept scientific evidence that the world might be a tad older than 6000 years and that there might be a reason that dissimilar species like dogs and bears, dinosaurs and birds, humans and chimps, share certain characteristics (it's called evolution for those not "in the know"), however, he should have a little sympathy.