Washington has not tried to compel another major power with sanctions since 1940-41, when America imposed them on Imperial Japan, culminating in an oil embargo and the seizure of Japanese assets in July 1941. At that time, the United States sought to deter Japan from seizing Southeast Asia and demanded that Tokyo withdraw from Indochina and China. Japan in turn concluded that American sanctions made the occupation of Southeast Asia essential, as well as the devastation of the United States Navy.
I've noted this before:
There's nothing wrong with raising the cost of acting contrary to our wishes and interests. And sanctions certainly set us apart from the target nations' actions. So there's value there.
But sanctions are unlikely to achieve our objectives peacefully for the simple reason that any sanctions that hurt a target nation enough to compel them to change their priority policies more to our liking will be sanctions tough enough to seem like an act of war to the target nation's leadership. So sanctions tough enough to work will likely just compel the target nation to escalate to military action as their response.
And Japan attacked us in 1941 despite having a GDP of only a tenth of America's. Because they believed they could get in a hard blow and deter us from retaking what we (and others) lost. And they assumed that without nuclear weapons, obviously.
So let's not assume that our rational is Putin's rational. He might believe a short, victorious war against a NATO member will break our resolve to sanction him and pave the way for more gains to roll back NATO expansion and isolate Ukraine from the West to allow Russian pressure to absorb the country proceed without our opposition.
To add to the fun, what if Putin believes that his flexibility in dealing with America is at its peak? What if he worries that whoever replaces President Obama in 2017 will react against the drift of American resolve?
What if Putin decides that he has a window of opportunity that ends in 2016 to inflict a local blow that will cripple NATO despite Russia's conventional military inferiority?
Have a super sparkly day.
UPDATE: Canada's NATO contingent has a helpful map for Putin:
Yeah. We're gonna need a bigger map.