Brad DeLong is a professor of economics at Cal.  Megan McArdle is a hack in the employ of the Atlantic (for some reason).

Megan, meet Professor DeLong.

The real treat here is that McArdle comes by DeLong's blog to defend her stupidity in comments.  DeLong, again, tries to clue her in.  The fun comes when she finally realizes her simple (yet gargantuan) error and has to finally utter the resounding mea culpa of, "Oops."

Megan McArdle supposedly holds an MBA from the University of Chicago.  I don't know what they teach MBA students there.  I do know that Megan McArdle would have found it difficult to pass her exams in an undergraduate economics program without having gained an understanding of present value calculations.  Perhaps that's why she majored in English Literature instead.

However satisfying an abiding fascination with Ayn Rand might be, it is not an education in economics.

EDIT: I thought that I should add the context here, which is political.  The argument has to do with the twin issues of the expiration of the Bush tax cuts and the fate of Social Security.  The GOP and their patrons are pushing hard to keep the Bush tax cuts, especially for the wealthiest Americans, and to reduce or eliminate (privatize) Social Security.  Obama has convened his group on the latter issue, lending his gravitas to the present sense of urgency.

Even though Social Security isn't in the kind of red ink that detractors will insist, you don't even have to get into that to see what's going on here.  McArdle makes her weird statements about present value because she's trying to come up with a way to argue that letting the Bush tax cuts would not pay for future liabilities in Social Security.  The problem with her argument is that figuring out what both the additional revenue from the expired tax cuts and the potential future liabilities for Social Security are require doing the same kind of present value calculation.  Except she's claiming that you can only use the calculation to figure out one, but not the other.

And then goes on to make other weird claims, like that the government can't save.  But then she is reminded that it can, to which she protests that government can't securitize debt.  Except for when she remembers that it already does that a whole bunch.

Seriously, the upshot is that she is a shill for people who want to take your money.  And her weapon is opaque arguments that feature a lot of exasperated nonsense.  And phrases like "all else ceteris paribus."

So, yeah.  Kochs and Ayn Rand and libertarians.  I hear those keywords rake in the hits these days!

And if you want to know more about present value, you can take a look here.

EDIT 2: Krugman on the GOP plan:

It’s hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice. Basically, he proposes two things: large tax cuts for the wealthy that would increase the budget deficit while doing little to support the economy, and sharp spending cuts that would depress the economy while doing little to improve budget prospects. Fewer jobs and bigger deficits — the perfect combination.