First, you have one point that is flawed in a major way:
22) The Economy is now in the best shape it has been in our lifetime.
By the time the fall elections roll around, it will be clear to most Americans that there are significant flaws in the economy and when people begin to think about the economy that will be "supporting" the boomers when they retire, it will gradually dawn on an ever increasing number of Americans that the existing socialistic model of our economy which is cast in concrete by current law is actually terminally flawed.
The disconcerting part of your case relates to labeling and how products can change. They still call them FORDS, but there is a vast difference between a 1930's Ford and 2006 Ford, or a 1930's airplane and a 747 or F18. The problem with current labeling is that a 2006 Republican is much more like a 1950's Democrat than a Reagan or Goldwater Republican. The Democrats have become radical socialists, but Republicans have been following the Democrats to the left. What are the "big" things Republicans have done under Bush? Campaign Finance Reform, Transportation and Farm Bills designed to gorge a hog, and Medicare Prescription Drugs, not to mention appointing a lunatic to head the Federal Reserve. Where have Republicans balked? Complete voluntary privatization of Social Security, ending the Department of the Education, ending the IRS, and except for genuine conservatives threatening to boycott the party, the Meirs appointment to the Court.
While the labels might lead one to think that Republicans have been winning and show genuine promise of continuing to win and therefore the country is becoming more conservative and returning to its Constitutional roots, the reality is very different. The problem with this scenario is that the Democrats are becomming communists and the Republicans are adopting the positions being vacated by the Democrats. While the labels are the same, the politics haven't changed, only now it's the Republicans in office who are becoming the closet big government socialists. It is very important not to be fooled by this.
Unfortunately, most left leaning societies tend to go more left when confronted with losing their socialist perks. They just steal more from those that work and give to those that don't. And that pushes them futher into decline...until they eventually collapse. The US is not near collapse economically, so until that happens we won't see any real reform.
"The problem with this scenario is that the Democrats are becomming communists and the Republicans are adopting the positions being vacated by the Democrats."
...which would be an explantion as to why the more unhinged part of the Dems base act the way they do, in spite of the fact that their behavior hurts their party. In the long term, their agenda gets implemented. If the elitist progressives decided to move their party back to the "center," how would things like universal health care and reducing the military be put on the table?
It's actually disturbing to read about a state rep here, and congressman there, flipping parties and becoming republican. How is NYC mayor Bloomberg a conservative? He switched parties not long before the election he won, and it was opportunism. The Dems become *too* left for some lite-socialists, and they think they can just move with their world view intact into the other viable party.
I'd be happy to see the day that the GOP activist base gives McCain a fat lip when he tries to win the next primaries, and he leaves to join the Democrats. Why not *they* go rightward, not us?