It looks like the former. Speaker Boehners publicly said, "Nobody wants to go there [credit default] because nobody knows what's going to happen" but he's taking us there anyway. Senate Minority Leader McConnell told Doctor Laura that, "[Democrats] want to blame the economy on us. The reason that default is no better an idea today than when Newt Gingrich tried it in 1995 is that it destroys your brand and would give the president an opportunity to blame us for the bad economy... We refuse to let him entice us in to co-ownership of a bad economy." Yet he's going to burn down the brand anyway simply to ensure Obama gets all the blame.

Lemme see if I understand the situation:

Republican say the federal debt is unsustainable, and simply raising the debt ceiling so we can keep spending will only make the problem worse. That's emphatically and undeniably true, perhaps the last such statement Republican leaders made since negotiations began. The GOP demanded spending cuts match any deficit increase, so Vice President Biden began talks with them that found $2 trillion in potential cuts. Obama proposed closing tax loopholes to bring total deficit reduction to $4 trillion. Republicans walked away, drawing heavy scorn from even their own fiscal conservative pundits (David Brooks wrote a particularly scathing indictment on Independence Day). Subsequently, Minority Leader McConnell (after saying Dems want to blame Republicans for the recession and that he won't let Obama "entice us in to co-ownership of a bad economy" ) offered Obama complete borrowing discretion that only a two-thirds vote could override. In other words, McConnell abandoned ALL GOP deficit reduction attempts AND surrendered to the President budgetary authority the Constitution clearly reserves to Congress, solely to blame Obama if the economy doesn't improve in the next year and a half. Never mind that there's no way in hell the House would pass a bill like that (I doubt the Senate would). Apparently keeping the lowest taxes in half a century is more important than cutting the deficit (the deficit didn't matter six months ago when Republicans demanded they keep the decade old Bush tax cuts), and scapegoating Obama is more important than cutting spending.

That second part may be hard. According to the latest Gallup poll, "Americans' preferences for deficit reduction clearly favor spending cuts to tax increases, but most Americans favor a mix of the two approaches. Twenty percent favor an approach that relies only on spending cuts and 4% favor an approach that uses tax increases alone. " Put another way, 76% of America wants spending cuts AND tax increases, so GOP leaders are not only at odds with Democrats, but voters. And voters know it, according to the latest Quinnipiac poll, which found that:

Perhaps most significantly, "American voters disapprove 56 - 38 percent of the way President Barack Obama is handling the economy, but by 45 - 38 percent they trust the president more than congressional Republicans to handle the economy, " leading one of its assistant directors to opine, "The American people aren't very happy about their leaders, but President Barack Obama is viewed as the best of the worst, especially when it comes to the economy". In other words, the conventional wisdom holds; Obama will retain the Presidency the same way Romney will be nominated for it: By default, because all alternatives are so much worse. Thus leading fiscally conservative Republicans say, "Republicans are not fit to govern".

Short form: GOP leaders are sacrificing America to fill their pockets with money an economic collapse will ruin. And the public knows it.