CSPAN: The Macroeconomic Sitch
links for 2010-09-09

Did Megan McArdle Really Graduate from a Business School?

She writes:

On Comparing Tax Cuts to Social Security: the only reason the [CBPP's two] numbers [valuing the size of the upper-income tax cuts and the Social Security deficit] looked even remotely the same size was that they were using a present value...

Did this person really graduate from a business school?

Either she needs her tuition back because they did not teach her what present value is for, or the business school needs to revoke her degree to get its reputation back because its graduates do not know what present value is for, or both.

When you want to compare two streams of cash flows to see which is more valuable--to sum up how much you should be willing to pay for it in one number--you compute present values.

That is what they are there for.

That is what they do.

That is the only reason they were developed.

That is the only reason that they exist.

Why oh why can't we have a better press corps?