USA tends to let the extreme right be while Germany stomps quite hard on them. A good review article here compares the responses of the two countries in terms of freedom of speech versus counter terrorism and counter ideological operations.
Here's the conclusion and the reference is given at the bottom:
Western governments face a quandary when approaching political extremism. As Ami Pedhzur asked, to what extent is it conceivable for a democratic polity to grant its citizens - including those who would undermine it - full liberty of action and thus expedite their efforts to bring about the system's possible demise?51 Generically, there are two approaches Western governments have taken. With regard to the first approach - the militant route - the state steadfastly defends itself from manifestations of extremism often through various "unconventional measures that circumvent standard legal and judicial processes." Such strong medication is justified to prevent "the Fascist cancer." With the second approach - the immunized route - the state endeavors to foster a strong rule of law and a robust civil society that can withstand subversive acts of defiance from extremist elements. When illicit extremism arises, defensive measures are employed. The immunized route emphasizes the legal judicial aspect in the sense that the state uses constitutional and statutory measures and follows the rule of law. The immunized model also assumes a strong connection to society. In order to effectively counter extremism, the immunized approach seeks to get at its "root causes" and mitigate them through social controls, such as education that inoculates young people against extremism. Two flaws inhere in the militant route. First, when a democracy pursues this course, it can conceivably undermine its own democratic principles and run the risk of becoming an authoritarian state. Second, by designating certain groups extremist and illegal, it can force those elements to go underground and adopt those actual features. In doing so, the designation can become self-fulfilling. Pedahzur sees the United States as the closest to the immunized model, whereas Germany is located between the militant and immunized models.52
The United States has a sui generis approach to political extremism vis-à-vis Western European states. However, as Cas Mudde pointed out, both actually share striking similarities. He identified the German and U.S. approaches as two ideal types. With the former, the defense of the democracy at the expense of civil liberties is paramount. With the latter, the state provides for as much freedom as possible. Although on paper, many Western democracies are closer to the American model, in practice they tend to follow the militant route. Increasingly, the United States - in the wake of 9/11 and the enactment of anti-terrorist legislation, such as the USA PATRIOT Act - actually fails to live up to the American model. Furthermore, with the assistance of various NGOs, the United States has taken a very firm position toward the extreme right. The results of their efforts have often been very punitive, as extremists are designated as beyond the pale of respectability often without hope of re-integration into mainstream society.53 What is unique about the U.S. model is the large reliance on NGOs in this area of policy; by contrast, in the German model the state acts largely independently of private agencies.54
In the short-run, state repression can be effective, especially if the targeted movement has not really established deep roots, yet it can also backfire. Arguably the 1992 Ruby Ridge and 1993 Waco fiascos were counterproductive. The siege of the Branch Davidian compound in Waco, Texas, which resulted in the death of over 70 persons, was the event that enraged Timothy McVeigh and set him on his course of action, which culminated in the 1995 bombing of the Alfred P. Murrah Federal building in Oklahoma City. The resentment resulting from the way in which the government handled these events did much to fuel the militia movement in the mid-1990s and so angered Timothy McVeigh that he perpetrated the most horrific act of domestic terrorism as a retaliatory attack.
It is worth mentioning that there are several significant differences between the extreme right in Germany and the extreme right in the United States that influences the responses thereto. First, with respect to electoral politics, in Germany, there are extreme right political parties that actually participate in elections, such as the NPD, the DVU, and the Republikaner Party. Admittedly, their success has been limited, but they are still able to garner some votes, and because of the system of proportional representation, it is conceivable that they could obtain representation in the national parliament - the Bundestag - if they attained at least the 5 percent threshold of votes cast. By contrast, the U.S. electoral system features single-member districts and the winner-take-all electoral system, which consequently results in a two-party system that is embedded in U.S. political culture. There are no real far right political parties in the United States, at least none that are viable. In fact, there are really no viable third parties at all in the United States. Even Ross Perot, a multi-billionaire with significant grass-roots support, was not able to establish an enduring political party. It follows that there would be no real compelling reason to ban extremist political parties in the United States insofar as their impact is negligible anyway. The system, for the most part, precludes minor parties from being viable. Extremists, such as David Duke, may run for office under the label of one of the major parties, as he did in the late 1980s and early 1990s, but the extreme right in the United States is currently confined to a social movement. Additionally, the extreme right in the United States is considered beyond the pale of respectability. No politician, or public figure, wants to affiliate with the movement.
In recent years one can discern some similarities between the extreme right in the United States and Germany, as social movements. As Jeffrey Kaplan and Leonard Weinberg observed in their study The Emergence of a Euro-American Radical Right, faced with a similarity of conditions in both North America and Western Europe - for example, declining White birth rates, sweeping Third World immigration, diminishing life opportunities for working class youths, and perceived cultural decadence - scattered elements of the extreme right around the globe have come to feel as strangers in their own lands and find solace in the slogan of "White power." Communicating through chat rooms and other Internet media, alienated Whites seek to develop a new "pan-Aryan" identity based on race and civilization that transcends national borders.55 To date, this convergence is primarily on an ideological plane - success at organizational level has been less forthcoming.
Finally, the German far right seems to be better established than its counterpart in the United States for a number of reasons. First, there is more of a coherent ideology that informs the German far right. By contrast, the far right in the United States is very fragmented - in fact it cannot be classified as a single movement - there are constitutionalists, militias, neo-confederates, and of course the racialist segment. Even in the racialist segment, there are still divisions, as some want to be more respectable and eschew anti-Semitism. Other more radical elements, however, still use the ZOG (Zionist Occupation Government) discourse. The more radical segment still disagree over things like tactics, religion, and so on. Compared to European nationalists, the American far right cannot organize on the basis of a national ethnicity, although they have sought to develop a surrogate concept centered on race. By doing so, they seek to establish common cause with racialists overseas. For these reasons, the German far right has been more resilient because it has deeper roots and thus presents a more serious challenge to authorities.
Several issues that appear to be fueling right-wing extremism - massive Third World immigration, multiculturalism, the ossification of established political parties in the West, and globalization - will probably become even more pronounced in the future. Consequently, how to properly respond to right-wing extremism is an issue that will continue to preoccupy Western governments throughout this century.
JO - Studies in Conflict & Terrorism
AU - Michael, George
AU - Minkenberg, Michael
TI - A Continuum for Responding to the Extreme Right: A Comparison between the United States and Germany
PY - 2007, VL - 30, IS - 12, SP - 1109, EP - 1123
AB - This article compares and contrasts the responses to right-wing extremism in the United States and the Federal Republic of Germany. Essentially, the approaches of these respective countries represent two polarities on a continuum. Whereas in theory, the United States allows extremist groups much more freedom to espouse unpopular ideas, the Federal Republic of Germany has the legal authority to disband extremist groups and parties that it deigns a threat to the country's constitutional democracy. Despite these seeming differences, both countries have responded resolutely to manifestations of right-wing extremism and have actually cooperated on numerous occasions to stymie American extremist activists that have propagandized in Germany. There are advantages and disadvantages to the approaches these two countries employ in countering extremism.