I tend to believe that they aren't all scheming geniuses as you seem to suggest they are.
It doesn't take a genius to realize that going bankrupt is bad, but compromise gets you killed by your voters... so you've got to find a way to not go bankrupt without compromising. Answer? A deadly game of brinksmanship. Both sides have nukes, and at least some on both side are probably willing to use them (i.e. let the nation collapse). But through a series of careful aggressions, proxy wars, periodic detente, and political exhaustion, the issue can be resolved. Compromise would be optimal, but compromise leaves you to open to attack.
The world is my prisoner's dilemma.
I also doubt that fear for the "greater good" is that much of a cause, else I'd expect a lot of ex-officials to testify to such a thing fairly regularly. Just looks like partisanry to me, though this doesn't mean that the people doing it are stupid. After all, a lot of money is involved here...
I think that most politicians have at least some notion, however misguided, that they are acting, ultimately, for the good of the nation. Not all, but most.
