Why is democracy something people should strive for? And how are we doing with ours?
Consider first the fundamentals. Why is there a role for democracy in any circumstances? Fundamentally democracy is a form of group decision-making. Political institutions are needed in circumstances in which decisions must be made that affect all members of a group. Each member of a group has his or her own set of preferences about choices that affect the group; so there needs to be a process for arriving at a set of social preferences -- a social choice function. Democracy requires designing a set of arrangements through which each person's preferences will have equal weight in determining the ultimate decision. Otherwise we would have a system in which one person decides (dictatorship) or a minority decides (oligarchy). So democracy represents a set of decision-making institutions that embody respect for the equal worth of all citizens when it comes to making collective choices.
In addition to the aggregation of individual preferences, democratic values consider as well the circumstances under which the members of a group form their beliefs and preferences. Narrow democratic theory takes individual preferences as exogenous. But broader versions of democratic theory attempt to bring democratic values into the social processes through which beliefs and preferences are formed. The theory of deliberative democracy emphasizes in particular the features of civility, mutual respect, and open-mindedness through which debate and critical examination of issues leads to a fuller understanding of issues and a more reflective set of preferences. This aspect of democracy is valuable because it corresponds to a society in which open and uncensored debate leads to the formation of individual and collective preferences and embodies the ideas of democratic equality among citizens. And less-privileged groups can exercise their voices in these forums to attempt to influence other citizens to support more just policies and choices.
There is another reason for cheering democracy: it is possible that democracy is more likely to protect the rights and needs of the relatively powerless in society; democratic institutions can function as a bulwark against the arbitrary power of elites of all kinds. If the powerless have political voice, they then have an ability to advocate for, and democratically support, the policies that favor their perspectives and interests. The fact that otherwise powerless people can express their preferences through democratic means is a substantial form of potential influence for non-privileged groups. (This political power is offset, of course, by the political power and influence wielded by elite minorities in most societies.)
The most fundamental reasons, then, to value democracy are its correspondence to the value of the moral equality of all persons and the capacity it creates for non-elite groups' struggles for fair treatment. Democratic institutions honor the equality of all persons in the fact that each person has an equal voice in deliberating upon and deciding collective policies. A democracy is morally preferable because it best embodies the more basic moral value of fundamental human equality and dignity and it provides a feasible mechanism for pursuing social justice.
So how does the US democracy measure up on these criteria? Take the last point first: the idea that democracy empowers the powerless. The role of money in politics takes a lot of the force out of this point in the US. Corporations and wealthy individuals are able to influence legislation, regulation, and policy in ways that are vastly disproportionate to their numbers (link). It is possible for a numerous group to exert political influence through the electoral process to defend its interests; but it is also possible for the powerful to quietly subvert these outcomes as well.
So how about the formative benefits of democracy? Do we find that American citizens are involved in thoughtful debates that bring more facts to the discussion and result in clearer preferences and policies? Here the answer is too often "no" as well. The shouting and vitriol on the media outlets of the right set a tone that discourages or extinguishes respectful debate and clarification. It's hard to see evidence that voters have gotten better at thinking through the issues, the facts, and the underlying values that can subsequently guide their political choices.
And how about the most basic function of democracy, its service as an institution that aggregates individual preferences onto a coherent social preference function? Even here our democracy has challenges. First, we don't seem to be trending towards "coherence" -- instead we have a Congress that mostly serves to block the formation of policy, from legislation to confirmation of appointment out of political opposition to the sitting president. And second, there is only a loose fit between the voting behavior of elected officials and the preferences of their constituents. Constituents have the ability to reject officials of whose voting behavior they strongly disapprove. But election campaigns have more to do with slogans and quick fixes than they do thoughtful efforts to align the candidate's platform with the diverse preferences of the electorate. Ideology and rhetoric drive electoral strategies, not honest discussion of the issues and the facts that surround them.
Take healthcare reform as an example. The reforms that the Obama administration fought for were plainly advantageous for a very large segment of the American population. Tens of millions of people stood to gain access to health insurance as a consequence of the reforms. And yet the voices of those tens of millions of people played almost no role in the bitter political conflict that ensued. Conservative theories and agendas, widely disseminated falsehoods ("death panels"), and purple rhetoric instead dominated the legislative and electoral process. Eventually a weakened version of healthcare reform became law, of course, but the process did a very poor job of embodying the interests of those most affected by the issue. (Here is a good post by Barbara Ehrenreich that updates her insights in Nickel and Dimed: On (Not) Getting By in America. Ehrenreich makes the importance of healthcare for poor people very clear.)
What American democracy is good at, by and large, is establishing government that is ruled by law. Legal and constitutional protections for citizens are a substantial bulwark against the arbitrary exercise of power by political or social elites. It doesn't need saying that these protections are incomplete, and that various groups in the US have suffered from illegal or unconstitutional treatment. (Consider, for example, the determined efforts being made by some state legislatures to deny partner health benefits to one specific group of citizens.) But by and large, US citizens have justified confidence that their rights will be respected and enforced. They have relatively extensive rights of speech and association, and it is difficult for government to curtail those rights for short term political or individual advantage. Citizens also know that they have the periodic ability to reject the men and women who rule them, which puts some constraints on the behavior of the elected officials.
It is possible that this is the most we can hope for from any government in a modern mass society. But it is also possible that a PhD student in comparative politics from Mars might classify our polity as "constitutionally regulated oligarchy with periodic elections of government officials and extensive infrastructures for managing elections to lead to outcomes that satisfy the elites" -- in other words, something rather different from idealized theories of "democracy" and political institutions well designed for establishing the common good.
(See Jack Knight and Jim Johnson, The Priority of Democracy: Political Consequences of Pragmatism, Ian Shapiro, The State of Democratic Theory, Amy Gutmann and Dennis Thompson, Why Deliberative Democracy?, and Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America for different aspects of this issue.)