Jack Balkin has delved into the legislative history of the provision of the 14th Amendment requiring the federal government to honors all debts, which the Obama administration may invoke if Congress refuses to lift the debt ceiling. He has a fascinating follow up post replying to some objections. He's arguing that the prospect of a debt default ceiling is extermely similar to the precise scenario the prvovision was designed to stop. Here's his historical example:

Imagine that the Democrats regained power in 1874 (In fact, they won the House that year and almost won the Presidency in 1876.) The economy had gone into free fall in the Panic of 1873, which was one reason why the Democrats rebounded politically.

Now imagine that the Democrats do not officially repudiate the Union war debt. They agree that these debts are legally valid. Nevertheless, they argue, the economy is in a bad way, and something must be done about the enormous waste and fraud involved in Union pensions, bounties, and defense expenditures, or to use a modern expression-- the exploding "entitlements" created by the former tax-and-spend Republican government. Therefore, they deliberately appropriate less than is necessary to pay the debts as they come due, and they prevent the government from issuing new debt to help pay off existing obligations.

The Democrats are careful to stop short of officially repudiating these debts. They do not say that they will never pay them. Instead, they argue that in the middle of a recession, the government simply does not have enough money to pay its debts to Union pensioners and widows, and fiscal prudence counsels against allowing Congress to raise additional monies to do so.

Of course, the Democrats say, they would be willing to consider changing their minds, but only if the Republicans agree to repeal the Civil Rights Acts of 1866, 1870, and 1871 and remove federal troops from the South (the latter actually occurred as a result of the Compromise of 1877, which smoothed over the disputed election of 1876.). The Republicans respond that this is blackmail, and that the ex-rebels are threatening to crash the economy in order to win concessions on civil rights and Reconstruction. The Democrats respond that they are only being fiscally prudent, that the costs of Reconstruction are bankrupting the country, and besides, they have never said they would actuallyrepudiate the federal debt. They are just putting it off for awhile until the country gets on its financial feet, or the Republicans change their minds about Reconstruction.

Under this set of facts, would section 4 be violated? Stern seems to suggest that it would not be, because all the Democrats are doing is threatening default and they are not repudiating federal debt. But I would suggest that this is very sort of thing that the Republicans were worried about. They feared that the Democrats would use a future economic crisis over the debt to wring political concessions. The Republicans believed that the ex-rebels and their sympathizers would someday return to power, and they wanted to prevent them from making payment of the public debt into a weapon of political threat and reprisal. If the practices I have just described would not constitute a violation of section 4, then the section is practically meaningless.

Again, I'm not saying this is op-and-shut legally. Indeed, it seems pretty likely that pursuing this course would lead to an impeachment crisis. But it still may be the least-bad alternative.