I have to believe that a bunch of the people in Wash-DC know this. The fools in Wash-DC are just going to loot the treasury for as long as they can. The real delusion for these fools is believing that they will survive the collapse and the subsequent aftermath unscathed and still fully in power.
Honestly, I don't think they do know. They are totally disconnected from the people they are supposed to represent and from what the government is doing to those people.
Take one simple example, the pending ban on incandescent lights. How did this happen? Does anyone think the net affect will be positive in the end? How can they get away with this?
I concur with the rest of your post.