You've heard their fantasy. Tiny government doing very little and regulating very little. People are responsible for themselves and get to keep their own money. It's the libertarian ideal. And to some people, it sounds good. But perhaps if people thought about it a little longer, and "did the math", they might come to different conclusions... unless they were among the few who would be the beneficiaries of such a New Gilded Age paradise.
Of course the US already has the largest inequality in its history, much worse than the rest of the developed world. But the very loud noises from Glennbeckistan remind us that we're still a good way from the society that the right wing longs for.
But we don't really have to speculate idly about what such a society would look like, since it has already existed here and still exists elsewhere. These are the societies that the bulk of the Banana Republican field wants to emulate.
Let's lay the ground rules and try to think like a real economic libertarian. First, no welfare -- that's considered redistribution of peoples' wealth to others who haven't earned it. And when you write "welfare" broadly, it includes a host of programs including Social Security, Medicare, Medicaid, food stamps, WIC, Section 8 housing, and many more. These vestiges of "socialism" all go away.
Second, no public services that could possibly be provided privately. So the military is still there, well-funded no doubt, and there's still a police force. There are probably private police too, to protect the gated communities of the rich; the public police are paid less and can be "entrepreneurial" in increasing their own renumeration. (In other words, they take bribes.) No public schools, of course -- the rich have good schools of their own, the middle class (what's left of it) has mediocre private schools, and many who can afford it will go to church academies. The poor, however, can't afford it, so if there is education provided for them at all, it's limited to sixth grade or so -- even servants have to know how to read and do enough arithmetic to handle their meager money, or hand out the right change with the fries. But such schools aren't designed for uppity folks.
Third, no business regulation. The constabulary protects private property against conversion (taking it outright), but indirect harm, like pollution, is a private matter. If you don't mind the stink from your own factory, your neighbor shouldn't mind either. So there's no environmental protection. Plus, no minimum wage, no limit on child labor, no building or housing codes, no product safety standards. All of those are infringements of business owners' liberty, after all. But let's not get carried away -- government still has to enforce morality, things like preventing abortion, maybe birth control, and the wrong kind of marriage. Drugs are okay though. That's a big part of selling libertarianism to burned-out former hippies.
Now how does that play out in practice? At the top of the scale, the rich pay even less in tax than now, and their business profits might be greater. So they live in more opulent gated communities. They can afford lots of servants - no minimum wage, after all, and no welfare, so the poor will do anything for something to eat.
In the middle, things get a little dodgey. Life becomes riskier. The very poor, with no government safety net, may become more likely to commit property crime in order to survive, so crime rates outside of gated communities may rise. Without public schools, education declines for most, and with it upward mobility. Religion plays a larger role in this part of society since they are likely to organize schools, funded with some gifts from the rich that make their prices just a bit lower than that of secular schools. Religious education will help control the masses and prevent too much independent thought, which might cause elections to be less, uh, predictable.
There are fewer middle-class jobs in this hollowed-out society, but a range of better-paid working-class jobs, like skilled laborer, mechanic, technician, nurse, soldier, policeman, and preacher, will continue to exist. Absent social security or other programs, peoples' retirement, if it exists, is based upon their ability to save, but that's not as easy as it sounds, since the financial sector, being unregulated, will have every opportunity to steal their savings.
It's the bottom of the pyramid (and it's likely to be the largest group) that really takes it on the chin. This is what we already see in societies that have not advanced past this stage. Most of Latin America and Africa, for instance, still suffers from this type of economic system. While Brazil is improving rapidly, it still has its favelas, and places like Guatemala and Peru still have teeming slums.
Life in these places is nasty, brutish, and short. Without any kind of welfare, people have to fend for themselves all of the time. They must find "work" of some sort. Since there is no minimum wage, jobs are often available, but at miniscule wages. Transplanted to the US as the Banana Republicans and "libertarians" would like it, we'd probably see factory jobs at maybe $2/hour (in 2011 dollars) and like-paying servant jobs. Those not chosen by factory owners would need to fend for themselves doing, say, "recycling" -- favela-dwellers often have to pick through garbage to find things of minimal value to sell. Without education, the children of the poor would stay poor, but without social security, the poor will want to have children to care for them once they're old -- that's one reason why poor societies have a higher birth rate than rich ones, after all.
We saw this in the US in the last Gilded Age. We had very poor people living in bad conditions. The political class lost their taste for it after the Triangle Fire, "The Jungle", and other exposes. But it continued to the south.
And the north-south divide has a lot of meaning too. Take its international context, where the north means the richer, industrialized world. Ever notice that the deepest poverty is in the tropics? Favelas and similar tarpaper slums don't provide heat, so they don't work in cold climates. Not for long (Hoovervilles notwithstanding). Cold-climate societies thus naturally recognize that humans can't survive "on their own".
But conditions in the north have been pretty bad. Slums in American cities were once much worse than what we have today. The Lower East Side in New York was a cesspit of disease and abject poverty, with large families sharing little flats with a shared toilet or outhouse. (I do recommend visiting the Lower East Side Tenement Museum if you're near, or visit, New York.) Likewise The Acre in Lowell and many other slums. These are at least enclosed shelter, but just barely survivable. And the same type of society existed in pre-WW I Britain, so you can read the novels of Dickens (or maybe Philip Pullman's Sally Lockhard stories, for a more modern approach that crosses between classes) to see what it was like.
Health care? If you're really rich, you can afford good care. If you're in the narrow middle, you just might be able to buy some private health insurance, if you're still healthy. (Absent regulation, pre-existing conditions and individual underwriting become the norm.) If you're poor, it's self-medication, folk remedies and faith healing for you, unless some charity -- even this is something Randists look down upon, but some well-to-do people might still believe in -- deigns to offer some care. But nothing fancy. No costly modern care. And diseases spread rapidly in slums. Hence life may be short. But that's all part of the plan, after all. And if you're handicapped, well, if no church or charity wants to care for you, why should others? That's just tough luck in the libertarian world. It's certainly not the government's job, nor incumbent on the "job-producing class" to take care of those who can't even hold a job.
That's the world that the Banana Republicans want, and indeed it looks like a banana republic. It's the feudal society that much of Latin America never overcame, the kleptocracy that is Nigeria, the ungoverned Somalia. Most American voters don't remember that from their own experience, and few have learned history well enough to know about it. And many simply assume that since they're white, it can't happen to them -- they'll always be on the rich side of the divide. Those foolish assumptions are what drive Republican support outside of the upper class. We thus need for people to understand the entire New Gilded Age vision that they are supporting. It's not "freedom" for them at all, just a new form of slavery on behalf the rich.