US Government Debt Different - Finance Department - University of ...

Charles W. Mooney, Jrcount holders on the date of issue (Record Date) which should notbe a date on which any Treasuries are maturing. The issuance andannouncement of the issuance would be made on the Record Datewith no previous information being released to the public. To avoidmanipulation, the announcement would be made on a Saturday andthe record date would be 12:01AM on the following Monday, inthe time zone immediately west of the international date line. Atthe opening of business on Monday in the U.S., the Federal ReserveBanks would enter the credits of the Prosperity Shares on thebook-entry accounts they maintain (or the credits entered over theweekend would become final). No corresponding debits of Treasurieswould be made to the accounts of the holders of record.181The Federal Reserve Bank account holders would, to the extentthey hold as intermediaries for their own account holders, credit theProsperity Shares to the accounts of their account holders. Those accountholders, if holding as intermediaries, would in turn credit theProsperity Shares to the accounts of their account holders and so ondown the chain. Because the Treasuries are book-entry, they must beheld in some form of intermediated securities holding system somewherein the world.The terms of the Prosperity Shares would provide that the ProsperityShares would discharge and satisfy a specified percentage (X%) of theaggregate Treasuries beneficially held by each account holder. 17 Theterms of the remaining percentage (Y%) of the aggregate amount ofTreasuries would remain unaffected. On the maturity date of eachissue of Treasuries, the U.S. would pay Y% of the principal (and interestif applicable) of the maturing Treasuries and those funds wouldfind their way to the accounts of the beneficial holders in the usualfashion.17 In order to ensure the effectiveness of a selective default, Congress also shouldwithdraw its consent to be sued in the Court of Federal Claims on account of thenon-exempted Treasuries. See text at notes 141-44, infra. An alternative but less effectiveapproach would be to eliminate the permanent indefinite appropriation, ineffect since 1977, for payment of all judgments of the Court of Federal Claims. See31 U.S.C. § 1304 (2000) (“permanent, indefinite appropriation” for payment ofjudgments as certified by the Secretary of the Treasury); 28 U.S.C. § 2517(a) (finaljudgments of the Court of Federal Claims to be paid by Secretary of the Treasurybased on presentation of a certification of the judgment).