I'll start by conceding that I don't have a fully clear understanding of the underlying machinations associated with the debt limit increase, but I haven't seen any convincing evidence against Obama and Dems just holding the line on a clean debt limit increase vote. Arguments against seem to be based on the assumption that Dems are going to crumble and accede to Rep demands in order to get it passed, but I don't see any signals suggesting that's a likely outcome. The assumption is based on previous concessions, but assumes that Dems haven't learned from previous concession-based failures, and ignores the inconvenient truth that the key Dem players are all apprarently willing to call the Rep bluff on this.
And it is a bluff. Whatever power and influence the far-right tea partiers hold, material interests are holding the leash. There may be some players betting against the house here, but the repercussions of a US debt default are devastating, and the majority of the big money players have no interest in playing that game out. You'll notice that there is no well-funded media blitz advocating for Cruz' crash and burn version of Economic Chicken. So far it seems to be just Cruz and Palin shouting "Burn Baby Burn!".
At this point, Republicans own
-the potential government shutdown.
-the potential US debt default.
-the ongoing sequester.
Why the hell would Dems consider negotiating? All they have to do is hold the line, while Cruz and his enablers/supporters' voicemails pile up with very important messages from key funders that "Crash and Burn" is not a viable option. Whatever game Boehner is playing, he has to factor in that his choices are going to determine the viability of the Republican party for a generation or so.
One clear outcome from the last time we went through this is that US debt default is a non-option. We may be stuck inside of an escalatingly insane version of Monopoly, but even the sociopaths know they're going to lose if the bank gets set on fire.
I see no value in Dem attempts at negotiation. The Republican Bull is threatening to smash up the china shop, which is all the reason needed for it to be lassoed and neutered. At this point, that course of action is becoming increasingly obvious to bot the public and "material interests".