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180 United States Sovereign Debt: A Thought Experiment On Default And Restructuringa selective default on such obligations and the ability of the U.S.to substantially shelter its offshore assets from execution by futurejudgment debtors. If neither of those situations could be established,by virtue of legal or practical constraints, then bilateral negotiationsmight be the only route forward. However, for this purpose, the restructuringproposals discussed in subpart B need not be airtight as alegal matter. They need only be adequate to present a credible threatof a selective default and restructuring so as to push major holders ofTreasuries to the negotiating table. 16B. Anatomy of a U.S. Debt Restructuring.This subpart outlines three alternative approaches. One is a selectivedefault initiated by the U.S. in lieu of a bilateral or multilateralnegotiated restructuring process. It is combined with unilaterally imposedrestructuring terms that would replace and discharge a portionof the Treasury obligations with new non-debt securities (ProsperityShares). A second is a selective default combined with the issuanceof reduced-value Prosperity Shares on account of a portion of theTreasury obligations, but without discharging or otherwise affectingthe legal status of the U.S. Treasury obligations. The third is an offerto swap Prosperity Shares for Treasuries on a consensual basis. Noneof the alternatives contemplates a selective default based solely on thenationality of Treasuries holders. The Treasuries on which a selectivedefault would occur would be determined based instead on broaderobjective classifications. But the structure and logistics could be employedto effect a selective default on any objective basis.1. Alternative 1: New Prosperity Shares in Satisfaction andDischarge of Debt.The U.S. would issue to all holders of record of Treasuries in thecommercial book-entry system on the books of the Federal ReserveBanks units of new Prosperity Shares. One unit of Prosperity Shareswould be issued for each $10,000 of Treasuries. The Federal ReserveBanks would credit the Prosperity Shares on their books to the ac-16 One participant at the Conference suggested that an actual default on the maturitydate of one issue of Treasuries should be sufficient to bring the major holders tothe table. Others thought the result of that approach would be market chaos.