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188 United States Sovereign Debt: A Thought Experiment On Default And Restructuringhas led one scholar to observe that “the intention was to lay down aconstitutional canon for all time in order to protect and maintain thenational honor and to strengthen the national credit.” 27 A Congressionalact that provides that the U.S. is not bound to pay a portionof its Treasuries debt as contemplated by Alternative 1 would, at leaston its face, appear to “question[]” “[t]he validity of the public debt.”The legislation would relieve the U.S. of its obligation to pay theportion of the Treasury obligations that would be replaced by theProsperity Shares.The only time the Supreme Court has construed Section Four wasPerry v. United States, one of the Gold Clause Cases. 28 These cases concernedprivate corporate bonds, a U.S. gold certificate, and a U.S.government bond. The obligations each included a “gold clause”which stipulated that the relevant obligation was payable in goldPost on the Debt Ceiling by Laurence Tribe, Dorf on Law (July 16, 2011) [hereinafter,Tribe, Guest Post], http://www.dorfonlaw.org/2011/07/guest-post-on-debt-ceilingby-laurence.html.(arguing that the reference to “the public debt” in Section Four islimited to indebtedness such as bonds) with Neil H. Buchanan, Borrowing, Spending,and Taxation: Further Thoughts on Professor Tribe’s Reply, Dorf on Law (July 19,2011) [hereinafter, Buchanan, Borrowing], http://www.dorfonlaw.org/2011/07/borrowing-spending-and-taxation-further_19.html (arguing that it extends to allU.S. government obligations). For present purposes, it is clear enough that the publicdebt includes Treasuries that are the subject of this discussion. For a thoroughanalysis of the 2011 debt ceiling crisis and debates over legal issues, see Jeremy Kreisberg& Kelley O’Mara (under the supervision of Howell Jackson), [Appendix (thisvolume)] [available at http://finance.wharton.upenn.edu/conferences/debtconf/].27 Phanor J. Eder, A Forgotten Section of the Fourteenth Amendment, 19 CornellL.Q. 1, 15 (1933); see also Michael Abramowicz, Beyond Balanced Budgets, FourteenthAmendment Style, 33 Tulsa L.J. 561, 585 (1997) (“A constitutional guaranteeprovided meaningful assurance to those who might purchase future governmentdebt.”); John McGuire, The Public Debt Clause and the Social Security Trust Funds:Enforcement Mechanism or Historical Peculiarity?, 7 Loy. J. Pub. Int. L. 203, 213-15(2006) (explaining that the clause was designed to have a lasting influence and covermore than just Civil War debts). Donald Bernstein explained at the conference thatthe inflexibility that Section Four affords the U.S. in circumstances of financial distresshas a very positive value. It forces “debtor discipline” which would be essentialfor a recovery. Donald S. Bernstein, Ch. 14 (this volume).28 The cases are: Perry v. U.S., 294 U.S. 330 (1935); Nortz v. U.S., 294 U.S. 317(1935); Norman v. Baltimore & Ohio R.R. Co., 294 U.S. 240 (1935) (consolidatedfor review with U.S. v. Bankers Trust Co.). See generally Kenneth W. Dam, From theGold Clause Cases to the Gold Commission: A Half Century of American MonetaryLaw, 50 U. Chi. L. Rev. 504, 514-18 (1983) (discussing the four major gold clausecases).