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On this we can agree - you said the Republican party in Arizona had 1.2 million registered members - is anyone demanding that a third party must meet that threshold? No - they're basically requiring a pulse - 5,300 out of a pool of millions. If, as you claim, so many people are dissatisfied with the duopoly, maybe this third party can hit up a few of the 1.2 million registered Republicans for some signatures - if the protest is so tangible, that should be easy too.
How do they develop that pulse if they can't even get their foot in the door? If a party is not on the ballot, they cannot take part in the debate. If they can take part in the debate, though, they have a chance to grow their demand. A reasonable system, like the old one, allows them to get their foot in the door. They still have about 400 hurdles put up by teh main parties that they have to overcome, but at least their foot is in the door.
The only purpose of this law is to prevent votes from being pilfered by other options (libertarians taking votes from republicans and potentially causing a win for democrats). Now, instead of actually providing a better product, the parties decide to make sure that the pilfering cannot occur. They utilize the system to avoid making improvements.
Unfortunately, humanity is ****ing retarded, so the people who are dissatisfied with the options (most people) will still eat the dogfood they've been fed because they buy into the line of bull**** about "the lesser of two evils". Instead of demanding that the market be allowed to decide unimpeded, people simply surrender to the dichotomy.