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I think, given the polarization of the country and the current administration's policies and actions, that a third party would cause more damage than good, and would not serve the needs of the country overall. Any new party would draw votes away from one of the other two current parties, and that potential draw cannot be quantified until the damage is done.
A third party is a luxury this democracy, ill as it is, cannot afford. I know Nader is thinking of running; this would be a bad idea. Right now, the primary goal must be to restore a more open democracy to power in Washington. Think what you will about the similarities between the two parties, but how many of Bush's really egregious policies (and there are plenty) can you see Gore putting in place? The Republicans have denied the normal process of government for their own ends and weakened process, precedent and goodwill along the way. This needs to be remedied first.
Here's an idea that might or might not work: A third party needs to recognize, as Nader has not, that a base must be built BEFORE, not BY or BECAUSE OF, an election. A third party should agree to support one of the two major parties' major candidates - for president, say - while their supporters get organized, define themselves and their party, and try their hand at local, state and national representative elections. When the party is strong enough to mount a good showing in Congress and has some legislative success, with evidence of their impact on policy and the people, then they can declare their intent to nominate an independent candidate for president. You still run the risk of drawing off votes from one particular party (witness Perot in '92), but the base and real Congressional presence might offset a dominant party's position (especially, in the case of Libertarians, the presence of more parties takes Congressional seats away from them).
Anyway, that's my two cents.
CS
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