"The dragon that I'm jousting against this year is this frozen monopoly of the two parties that have frozen a lot of people's thinking in place," says William Weld, former Republican governor of Massachusetts and current Libertarian party vice presidential candidate. "And they think, 'I have to be a right-winger,' or, 'I have to be a left-winger.' They're not thinking, 'What do I think?'"

Weld and his running mate, former Republican governor of New Mexico and Libertarian presidential candidate Gary Johnson, are trying to pry open the vise grip that the Republican and Democratic parties have held on electoral politics for decades. They believe the historic unpopularity of the major party candidates gives them a unique opportunity to present their brand of fiscal conservatism, social tolerance, and a non-interventionist foreign policy to the American public.

The candidates point out that a plurality of the public already broadly reflects their views. If they can make their pitch successfully, they believe they'll garner 40 to 50 percent of the vote, enough to pull off one of the biggest electoral upsets in American history. But what is their pitch to different constituencies, and are these optimistic projections actually within the realm of possibility?

Reason TV's Nick Gillespie sat down with Johnson and Weld at FreedomFest in Las Vegas earlier this month to discuss their platform, prospects, and pitches to disgruntled Republicans and Democrats. The Libertarians have reached new heights in national polling in the weeks since, drawing 13 percent in the latest CNN/ORC survey (at the time this interview was taped, their best result to that point had been 12 percent in a July 8-12 CBS News/New York Times survey).

In a wide-ranging discussion, the nominees clarify how they would handle balancing the budget, scaling back the war on drugs, reforming entitlement programs, selecting Supreme Court justices, addressing immigration and national security policy, and more. Watch the video above for the full interview, or scroll down for downloadable versions.

About 19 minutes.

Hosted by Nick Gillespie. Produced by Justin Monticello. Shot by Meredith Bragg and Jim Epstein. Music by RW Smith.

Scroll down for downloadable versions and subscribe to ReasonTV's YouTube Channel to receive notification when new material goes live.

This is a rush transcript. Check any quotations against video recording.

NICK GILLESPIE: Hi, I'm Nick Gillespie with Reason TV, and today we're talking with William Weld, former governor of Massachusetts and vice presidential candidate for the Libertarian Party, and Gary Johnson, former governor of New Mexico and the presidential candidate nominee of the Libertarian Party, at Freedom Fest in Las Vegas. Thank you guys for talking.

GARY JOHNSON: Yeah, thanks.

WILLIAM WELD: Thank you so much.

GILLESPIE: Let's get right at it. You are, according to a most recent New York Times poll, you're at 12 percent. Why is that happening, and where does it end?

JOHNSON: Well, it's happening because, first and foremost, arguably the two most polarizing figures in American politics today, Trump and Clinton, so that's the primary factor. But secondarily, two Republican governors, two term, getting re-elected in states that are heavily Democratic. I mean, I think there's a lot here in the Libertarian ticket. I think, I think we're reflective of most Americans which, speaking with a broad brushstroke, is being fiscally conservative and socially tolerant, liberal, whatever, as long as you don't force it on me. And a big unoccupied space too, is nobody is standing up and saying, "Let's stop dropping bombs. Let's stop with the military interventions. They're having the unintended consequence of making things worse, not better." There's no peace candidate.

GILLESPIE: What is the worst aspect of a potential Trump presidency, and what is the worst aspect of a potential Clinton presidency?

WELD: I'll start with Trump. You know, I don't think Mr. Trump has made a great study of the issues. I'm not sure he's read deeply in history as it might apply to current political decisions, so I see a shallowness.

GILLESPIE: So, we'll talk, but immigration. Isn't that what people want? They want to restrict immigration. They want restrict Syrians or Arabs or Muslims.

JOHNSON: You know, having been in New Hampshire and having been in the Midwest, what I have recognized is that 30 percent of Republican voters believe the scourge of the Earth is Mexican immigration. Now, it was my voice in 2012 that said "No, that's not the case," but I know that that group exists. And you know, when things are bad, you look for a scapegoat and, in this case, "They're taking jobs that U.S. citizens could have!" Well, no, they're not. They're not murderers and rapists. And the notion of rounding up eleven million undocumented workers, how's that going to work out in New Mexico where 50 percent of the population is Hispanic? Well, they're gonna…the federal government's going to start knocking on doors? It goes and on.

WELD: But the other thing is the rule of law and the Constitution, and we pride ourselves on the rule of law in this country, not only socially and in terms of our government, but also our economy, both domestic and foreign. Now, Mr. Trump has suggested he would slap on a 45 percent tariff on Chinese goods, 35 percent tariff on Mexican goods, build a huge wall and make the Mexicans pay for it. Any number of things that would violate his duties under the Constitution. He sent a fundraising letter to members of foreign legislatures. That's a violation of the Emoluments Clause. We would be hold before the Court of International Justice in Hague as a rouge nation if we did everything Donald Trump has proposed in the area of foreign policy. I'm not kidding!

GILLESPIE: I know, I was going to say Hague will be the least of our problems, right, in the court of international opinion. But Hillary Clinton, now. You talk about protectionism. Hillary Clinton is against, she's talking down NAFTA. She started doing that in–

WELD: We're the only free trade ticket out there! We're the only ones!

GILLESPIE: So, what is particularly bad about Hillary Clinton? I mean, she's a protectionist, too. What would be terrible about a Hillary Clinton presidency?

JOHNSON: That she is the establishment. Nothing's going to– Actually, things are going to change. Government's going to try to do more in our lives as opposed to less, so that's going to mean higher taxes, and that's money out of your and my pocket that we could be spending on our own lives opposed to government knows best. And she is really, and I don't think this has been intentional, but she's really be the architect of our foreign policy that has made things worse not better, using Syrian and Libya as an example. You know, going in and supporting the opposition in those two countries that are aligned with ISIS. You can't make this up, this is what has happened.

GILLESPIE: Say something negative about Hillary Clinton. You've been dinged in the press. You seem– you are friendly with her, and you like her as a person, but–

WELD: Oh, I'm old friends with both Clintons, but election time, at the end of the day, there are no friends, okay? The first thing I would say is the fiscal situation. When President Obama leaves office, the national debt is going to be $20 trillion, doubled since not so long ago. You can't go on like that. You can't go and try to renegotiate the terms of our national debt with the Chinese. That's Trump, not Clinton.

GILLESPIE: Right.

WELD: I think it's something she truly believes. That she would like to raise the amount of social spending, raise the amount of government spending called "investment" on the Democratic side of the aisle, and I think that would be bad for the economy. It would hollow out the economy. We're small government people. We cut taxes. We shrank government. The Democrats would go the other direction.

GILLESPIE: You know, we are spending about $4 trillion a year, the federal government. In the first budget that is signed by the Johnson/Weld administration, how much are you going to spend and where do you take it from there?

WELD: You cannot do the Washington thing of assuming that anything than a five percent increase is a cut. That's Washington speak and what the two party duopoly has gotten us into. Both parties!

JOHNSON: if you only have a two percent rate of growth in government, overall government spending, you balance the budget in five years, so–

GILLESPIE: So, would you freeze spending or keep it below two percent annually?

JOHNSON: We would come out of the chute proposing a balanced budget. Twenty percent of government spending is becoming debt.

GILLESPIE: Would you cut 20 percent from–

JOHNSON: Proposing, yes. Proposing a balanced budget, yes, which would in fact target a 20 percent economy.

WELD: It's not a bad goal, you know. I've been around government a long time for my sins, and I think between 10 and 20 percent of most budgets are overspent. People in Washington particularly do not understand there is no such thing as government money; there's only taxpayer's money. They think it's their money.

JOHNSON: You can't do it without addressing military spending. You can't do it without addressing the entitlements. Medicaid and Medicare, Social Security, raising the retirement age. You could have a very fair means testing to go along with Social Security.

GILLESPIE: So you would – so, what you're putting– it's not even that you're saying you're putting it all on the table. What you're saying is you're going to cut defense spending, you're going to cut entitlements–

JOHNSON: Military spending. I think defense is, you know, I think

WELD: But you know, we're not just saying this, we did it! My first year in office, we cut spending in real dollars.

GILLESPIE: What did you cut?

WELD: I cut everything. What you have to do is zero base the budget. You assume appropriation is zero when you start the year. That's why it helped both of us. Our first job in elected politics was governor, so we didn't know there were sacred cows in the budget. We didn't even know there were cows, and the same thing would be true in Washington.

JOHNSON: We're planning a partnership in this, also. No separate staffs. You know, staffs seek to divide, and–

GILLESPIE: And you guys aren't sick of each other yet?

WELD: No.

JOHNSON: No, actually it's kind of growing thing.

WELD: I did this for seven years with my lieutenant governor. We never had an argument.

GILLESPIE: Governor Johnson, what was the big thing you cut in New Mexico? And you didn't cut spending, you reduced rates–

JOHNSON: No! Cut, reduce the–

GILLESPIE: What was the toughest thing? What was the toughest cut or reduction that you–

JOHNSON: *laughs* Well, it wasn't tough, but we reformed Medicaid in the state of New Mexico, and get this: I had an insurance policy as governor of New Mexico for my family, provided for me by the state. Gee, what if we took my insurance policy and gave it to everybody who was receiving Medicaid? Would we actually cut the cost of Medicaid by 20 percent? Yes.

GILLESPIE: So, how do you do that? How do you do that if your president and vice president? You're dealing with Obamacare. Do you repeal Obamacare? What happens?

JOHNSON: Well, of course, you know, we're looking to get elected President and Vice President, not dictator, not the king. But that said, whatever comes out of Congress is ultimately what you end up supporting or not supporting. So, with regard to Medicaid and Medicare, the only way in my opinion we reform these two areas are to give these areas from a service standpoint up to the states. And having been governor of New Mexico, in my heart of hearts, if the federal government would have given me a fixed amount of money, same amount as the year before, I could have drawn new lines. There would have been a safety net. No one would have gone without. But that's how you get it done. Washington one-size-fits all? I don't think it's possible.

WELD: Another couple of touchstones. Pretty more personal choice into the healthcare area. More competition, letting people shop across state lines. I would let people shop into Canada. It wouldn't shock my conscience. On how you cut the budget a lot: two very quick examples from Massachusetts. We put in a work requirement for welfare, so you have to have a job if you're going to get welfare. Welfare costs went down over 75 percent the next year. People were not ready for that. We did the same thing when I was a prosecutor. I convicted a lot of people for phony pensions. They would say, "I slipped and fell. I want a million dollars." So, I convicted three people in criminal court in Boston. The next year, the number of disabilities pensions filed for went down nearly 75 percent. Huge costs savings, and it wasn't a budgetary thing; it was a qualitative thing.

GILLESPIE: The Supreme Court looms large in everybody's political calculations. Who are the Supreme Court picks you're going to make?

JOHNSON: Really, there are going to be no litmus test. You're going to appoint good people, and you're going appoint people that look at the Constitution of original intent.

WELD: Well, I don't think you have to panic and say it has to be a way lefty or way righty. Steve Breyer has been a good justice. He was appointed by Democrats.

GILLESPIE: A Massachusetts guy, right?

WELD: A Massachusetts guy. Merrick Garland, I think, would have been a very good pick, and he's nominated by Obama. Everyone sort of agrees on that. It's just the two party hysteria that says, "Just as you can have far-right congressmen in the Republican Party and far-left congressmen, congresswomen in the Democratic Party, therefore the same is true for the Supreme Court." The opposite is the case. You want people who are tranquil of mind and can analyze the issues and come to a conclusion that makes sense, rooted in the jurisprudence of our country going back hundreds of years.

GILLESPIE: You mentioned far-right and far-left people in Congress. Who are current members of the Senate and the House that you think you can work with? Because if you guys come in, obviously you're not going to have a libertarian Congress.

JOHNSON: I think there is a real opportunity to, not naming names, but just–

GILLESPIE: Name names! Name names.

WELD: Rob Portman, obviously. Kelly Ayotte. Susan Collins, the best of all. Mark Kirk on the Republican side. A guy, he's a challenger, Russ Feingold in Wisconsin. Not saying I'm endorsing him, but he's obviously a person of substantial ability.

GILLESPIE: So these– But, you've named people like Collins. But most Republicans and, even I think, most libertarians would say Susan Collins is terrible. She votes for more spending. She is not great on the Second Amendment. She's a wishy-washy, kind of country club conservative. You disagree, though?

WELD: Yeah, I do.

JOHNSON: I'm going to say they challenge Republicans to be good at what they are supposed to be good at, which is dollars and cents, and they are not good at that at all because they pick and choose. They want to cut from Planned Parenthood, but they want to increase the military budget. Well gee, that just doesn't work. And then Democrats, look, come on! Let's stop dropping bombs. Let's really take a hard look at our military policy. Let's get Congress involved and a declaration of war and how we move forward. And mandatory sending, ending the Drug War. Come on! This is a huge issue–

GILLESPIE: These are the things that Democrats should be–

JOHNSON: They should be good at that they're not good at either! Come on!

WELD: Let's talk about Washington if we win, if we get in there. I think it will almost be a relief for members of Congress to have us not being tendentious, not coming in saying, "This is how it's got to be." We will hire the best of the Democratic Party, the best of the Republican Party, the best of the Libertarian Party and the best of all of those unaffiliated with any party. I almost think that would be appreciated by Congress so they won't have to think, "What's my party say I'm supposed to do?" They'll be able to think, "What should I do?" That would be a big change.

JOHNSON: And I'll just tweak that a little bit. Republicans, Democrats with a libertarian bent.

GILLESPIE: So, make the best pitch to Democrats who are going to vote for Hillary Clinton, but, you know– Trump and Hillary Clinton, as you mentioned, historically high disapproval ratings. Nobody likes them, even in their own parties. What is the pitch to Democrats: "Don't vote for Hillary, vote for Johnson and Weld?"

JOHNSON: The whole honesty and integrity and telling the truth. I think we've had careers based on telling the truth, and when you tell the truth, that's admitting mistakes, also. Make plenty of mistakes but–

GILLESPIE: But Hillary does not tell the truth.

JOHNSON: Well, I think there's a judgment issue that if I were to have made those same judgment issues, I would like to think that, "Whoa! I made some really poor judgment here! Guilty!"

Guilty the judgment, not guilty of criminal intent. That was not the case. But that's not something I think you hear her say.

GILLESPIE: What's the case to Republicans who cannot bring themselves to vote for Donald Trump, or actually might be thinking about it? What do you say? Why should you vote libertarian?

JOHNSON: Same thing! Look, you know, there is a path down the middle here that really does address smaller government. That smaller government is something that is desirable, that liberty and freedom is important. And it means you can be a social conservative, but don't try to force that on me. And I get the pressures that come with being in elected office, and "Shouldn't we bomb ISIS?" And the kneejerk is always yes, and so it's drop bombs first as opposed to let's look at how that might work over a long period of time.

GILLESPIE: What about Bernie Sanders? He is a progressive. He is a social progressive. He wants to grow government. What is the pitch that you guys make to disgruntled Bernie Bros to vote for you?

JOHNSON: Take the ISideWith.com quiz, see if you turn out like me. I side with myself most, and next in line I side with Bernie Sanders. But, here's my contention, are Bernie Sanders supporters really about income equality, or are they about opportunity equality? And if they're about opportunity equality, and this is really, this is crony capitalism, this is the fact that government is for sale, it's being sold, you've got money, you can buy influence and you can buy prosperity. Well, we're going to offer a big dose of government can provide equal opportunity, and if people see that, I think that's more important, or that is something achievable.

WELD: Even more than anyone issue I think, the dragon I'm jousting against this year is this frozen monopoly of the two parties there that have frozen a lot of people's thinking in place, and they think, "I have to be a right-winger or I have to be a left-winger." They are not thinking, "What do I think?" And if we can shatter that and get them asking the question, "What do I think?" and then listen to the three offerings, they're going to come our way, and I don't mean 20 percent of them. I mean between 40 and 50 percent of them, and that's the election.

GILLESPIE: You're traveling all over the country. What are the types of people that are connecting with you the most? Do you have people coming up and saying, "I didn't know I was a libertarian until I heard you guys talking?" Who are those people?

WELD: Hundred people a day. Hundred people a day.

JOHNSON: Democrats, Republicans, Independents. Equal amounts.

GILLESPIE: How are young people responding to this message?

JOHNSON: You saw the poll the other day. We're polling higher among millennials than Donald Trump.

GILLESPIE: Why do you think that is?

JOHNSON: Well, I think that this is the notion of being socially "who cares, as long as those choices don't adversely affect others." Dropping bombs, I think– young people recognize the world is not a safer place at all for all of what we're doing overseas. And then, I really do believe that young people recognize that the system is rigged. That, in my opinion, is not income equality. That's equal opportunity, and that we can offer a big dose of that.

WELD: You know, I hadn't thought of it this way before, but we're both young at heart. We haven't had that squeezed out of us.

GILLESPIE: Talk about the future. You know, one of the things that is interesting is that both Hillary Clinton and Donald Trump, you know, they are not that much older than you. You guys are all baby boomers of one stripe or another, but they never talk about the future. They don't even talk about things like Uber, the sharing economy unless they are saying it needs to be regulated and shut down.

WELD: *laughs*

GILLESPIE: What is your vision of a future America?

JOHNSON: Well let me start with the present. Has life in America ever been better than it's been today? No, it hasn't! We get along better, kids are smarter than ever, the number one law enforcement tool is (pulls out iPhone) this guy right here when we're witnessing that all the time. When you think about the future and you think about a model of entrepreneurism where the middle man can be eliminated and you, as a provider of goods and services, can make more money, and people that are buying those services pay less. That's an excit– Airbnb! Kate and I, we have a home in Santé Fe. I think we can rent that darn thing out part time for– make an extra 40 grand a year. Well, the city of Santé Fe bans Airbnb. Come on! If that was money in our pockets, we'd be spending that all over Santé Fe. Well, they are protecting the hotel industry, and I just think there is a closed mindedness with Democrats and Republicans. You know, protect the status quo when–

The future is wide open if we'll just get a libertarian bent on the whole thing.

GILLESPIE: We are going to leave it there. Thank you so much. We have been talking with Governor Gary Johnson, running as the Libertarian nominee for president, and Governor William Weld, the vice presidential Libertarian nominee. Thanks so much!

WELD: Thank you so much.

JOHNSON: Thank you so much.

GILLESPIE: For Reason TV, I'm Nick Gillespie.