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The Liberal Democrats in the UK have a lot of issues that just aren't relevant to US politics (Europhilia, changing the way House of Commons members are elected, etc.) It is not correct to consider the Liberal Democrats a "liberal" party in terms of US politics (fun fact, the "Liberal Democratic" party in Russia is neither liberal nor democratic as they essentially advocate for Stalinism without the Communism.)
Off the charts, a conservative in the UK would be considered a liberal in the USA.
Exactly. Although the Liberal Democrats have had to go along with some "Conservative" policies as a result of entering into a coalition with the Conservative Party.
The Liberal Democratic Party traces its roots to the nineteenth century Liberal Party, which championed lassiez faire economics and the interests of the merchant class. During the beginning of the twentieth century, the liberal Party started to move to the left in order to prevent the Labour party from getting too much support. During the Great Depression, the Labour Party had effectively replaced the Liberal Party as the main opposition to the Conservative Party. The Liberal Party still existed, however.
In the 1970s-80s the Labour Party became quite left-wing and favored widespread nationalization of industry. Several moderate Labour Party members left the party to form the Social Democratic Party, which shortly thereafter merged with the Liberal Party to form the Liberal Democratic Party.
In the 1990s, Tony Blair transformed the Labour Party, making it a centrist or even right-leaning (depending on your perspective) party and, as a result, the Liberal Democrats were, for a time, viewed as the most left-wing of the three major parties in Britain. That changed when Tony Blair resigned and the Liberal Democrats entered into a coalition with the Conservatives, and, as a result, ended up supporting some Conservative Party policies they had previously opposed.
Overall, Nick Clegg (leader of the Liberal Democrats) is clearly to the left of Obama.
Our election system is first past the post and Congress is not a parliament. Those make 3rd parties of any type have a tough time once you get past local elections. The voting systems of other countries make it easier for 3rd parties to hold some power.
Also you have to define liberal. Liberal how? In terms of say social mores? Business? Pro-union?
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