Very likely, neocon pants are shivering, but they can (and probably wish to) talk themselves into utter craziness. If the markets and economy collapse, they have one way out of shame...
A total meltdown, or an undeniable indication of a coming one, and the balloon goes up.
Are we pretty close to that point now?
In answer to the question posed--it seems to me that nuke use will be a diplomatic catastrophe for the US (perhaps fairly near the Nocon's apocalyptic desire) and the death of Atlanticism, since it is hard to imagine any EC nation supporting such an act. Not so much for mopral; reasons, though I not so cynical as to discount that, but because it's totally idiotic.
I say again, the Empire can (and will) villainize anyone,with their tame media, when they need a scapegoat. Like Now.
As an essential policy component, one must be sure to NOT be that villain. Let the Chinese eat that one, they are saying, I think. That seems pretty much obvious to me, and I'd bet that such considerations are discussed in the seats of policy Europewide. A European Marshall plan? TALK of such a thing? Would be a good vaccination for the disease of villany that the US will surely sow.
Nonetheless, I still don't see it, unless the Bush admin has just chosen to go it naked-- without even a real fig leaf. The abruptly released NIE just blew away all the old foliage. Note that they will classify the next one, and not even provide a "sanitized" public version. "There is mysterious music in democracy, when people decide to believe in themselves." ---Bill Greider, The Nation.