I apologize; I completely miswrote that sentence. I didn't mean to say that the public thinks the IDEAS themselves are nuts, but rather that everything the Libertarian Party has to say is nuts by definition. That is to say, they think capital-L Libertarians are a little loony.
The blame for this lies squarely at the feet of the LP itself; their entire public relations staff ought to be burned at the stake, because every press release they put out seems to have a tone somewhere between "nyah nyah, [insert current president here] screwed up, we were riiight!" and a Lyndon Larouche conspiracy theory document.
Not that changing PR strategies would suddenly raise the LP to 20% in the polls; I stand by my theory of the inherent unworkability of third parties under our system of government. But really, making the public stop thinking you're a bunch of crazies is the first step. At the very least, they'd be far more likely to at least consider LP policy positions.
I rarely heard people stating that the libertarians were 'nuts' because [...]. I do know that most who state that the libs are 'nuts' have no idea what the libertarians stand for but were told that they were nuts and, absent any first-hand information, simply repeated what they were told - which would place them into the ever-popular and always in-the-majority 'sheeple' crowd.