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176 United States Sovereign Debt: A Thought Experiment On Default And RestructuringAn analysis of the likely impact of a U.S. default and restructuring ascontemplated here is beyond the scope of this essay (and my expertise).Reducing the U.S. debt burden promises obvious benefits. Butthat is only one piece of the puzzle.III. Outline of a Restructuring: Informational, Logistical, andLegal (Including Constitutional) ImpedimentsThis part assumes that the U.S. might wish to restructure its debtin the future. It explores how the U.S. might go about this task andidentifies various problems and impediments that would lie in thepath of a restructuring. The restructuring of sovereign debt is necessarilycomplicated and difficult. This would be especially so in thecase of U.S. debt.A. Dynamics and Strategy.Restructuring of U.S. obligations on Treasuries would face a significantand obvious complication. In general, the U.S. does not knowthe identity of the holders of its Treasuries that are held in the commercialbook-entry system. (By “holders” of Treasuries, I mean theultimate beneficial owners on the books of a Federal Reserve Bank oron the books of another intermediary with which the holder maintainsa securities account, as discussed below.) It is true that we readabout the large foreign holders of U.S. debt, including the Chineseand Japanese governments. But these data on holders of U.S. debtcome from surveys. 9 With the exception of Treasuries held in the9 See Major Foreign Holders of Treasury Securities (Jan. 2011 – Jan. 2012) availableat http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt (March 15, 2012) [hereinafter, Major Holders].Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills,bonds, and notes reported under the Treasury International Capital (TIC) reportingsystem are based on annual Surveys of Foreign Holdings of U.S. Securities andon monthly data. These data help provide a window into foreign ownership of U.S.Treasury securities, but they cannot attribute holdings of U.S. Treasury securitieswith complete accuracy. For example, if a U.S. Treasury security purchased by aforeign resident is held in a custodial account in a third country, the true ownershipof the security will not be reflected in the data. The custodial data will also notproperly attribute U.S. Treasury securities managed by foreign private portfoliomanagers who invest on behalf of residents of other countries. In addition, foreigncountries may hold dollars and other U.S. assets that are not captured in the TICdata. For these reasons, it is difficult to draw precise conclusions about changes in