A "permanent wedgie" is when the following happen:
The victim gets their underwear pulled from both the front (also called a melvin) and back (also called wedgie) while still wearing them. The underwear is held in that position. Lace, rope, string, belt, etc. is looped through the legholes at the front, brought over the shoulder, and looped through the legholes in the back. It is then tied, giving the person a permanent wedgie.
Other words to know:
wedgie - pulling one's underwear from the back, causing the underwear to "ride up", or become wedged between the buttocks. As the wedgier, or giver, pulls higher, the underwear pulls up on the buttocks causing friction burn. Usually done to people wearing the dreaded briefs.
melvin - pulling one's underwear from the front. On men, this causes pain in the testicles because the underwear becomes confined, squeezing the testicles together. On women, it becomes wedged in the vaginal area.
After losing a bet, I had to get a permanent wedgie and keep it on for one hour