There's some heavy flirting going on between the Libertarians and the Dems over at Catounbound. Markos is making a bit of hash of it, but I think this discussion might take off with a resulting shift for one of the two parties. One of them has to come to their senses.
I found one interesting proposal at TCS Daily:
This tactic is nothing new, since the Democrats are not the ones keeping the libertarians from reaching mainstream status. The libertarians have to fight against the Republicans, because they and the libertarians have the most in common. When conservative Americans look for a party, they wouldn't be chosing between Reps and Dems, but between Reps and Libs.
Well, there was a time when the Republicans stood for a cheap, unobtrusive government and lots of individual rights, but those times are gone. If it weren't for that, most Libertarians could probably be happy as one wing of the Republican party. Instead, the changes in the Republican agenda has thrown them into a limbo not unlike what happened with Red Tories, and they have formed their own party since nobody else seemed very in tune with them.
For them to ally themselves with the Democrats makes some sense, regardless of where the votes may come from. Aside from issues related to gun registration, the Dems are looking like the less socially authoritarian party right now, and that's what counts to Libertarians.
They've certainly fallen for the theocrats and neocons lies so far. Let's see how long that lasts. I don't think Santorum will be joining the Village People, and I don't think Libertarians will be voting for a socon "Republican Base" sort of candidate in the near future. Until the Republicans can remember their roots, it will be a Southern Theocratic Christian party with little cross over. I'll write in Ron Paul before I vote for another big government conservative.