Megan McArdle and Paul Krugman are econopundits who write regular columns and keep up blogs, but that's where the similarities end. The Atlantic's McArdle is a small-government libertarian. The New York Times's Krugman is a big-government liberal. McArdle really, really doesn't like Krugman's ideas and says so almost weekly. Krugman has directly engaged McArdle once, but his frequent derision of libertarians would certainly include her.
[Y]ou can see this as basically just another commercial real estate bust. Either you view Dubai World as nothing special, despite sovereign ownership, as Willem Buiter does; or you think of the emirate as a whole as, in effect, a highly leveraged CRE investor facing the same problems as many others in the same situation. Finally, you can see Dubai as sui generis. And really, there has been nothing else quite like it.
I agree with Professor Krugman--it's hard to see this presaging a sovereign debt default by, say, the United States.
The truce in the McArdle-Krugman econo-war is unlikely to stand, so enjoy it while it lasts.