Hysterical response function

"Default with a downgrade is a game changer," warns Tim Ryan, the head of the Securities Industry and Financial Markets Association, "with dire consequences for money funds, capital markets and banking systems broadly. It will be a systemic event in its own right." The Treasury Department will not admit outright that bondholders will get prioritized over, say, Social Security recipients. But they will. Ann Lowrey

Lets give is a some initials, HRF. Economists should look at that. Hysteria yields violence. So, the object of restructuring would be to dissipate as much hysteria as possible before the actual event. As soon as Treasury buys into the concept of a haircut, we can move on.

Remember the ultimate aim is a better distribution of Senators. As Treasury rides out the building hysteria, the price of Senators goes down. If we restructured properly, the debt gets split three ways, regional governments take a third. Entitlements get passed dwn, but the greater the HRF of the beneficiaries, the worse deal they will get.