The US Constitution lays out a constitutional republic as our form of government. This particular form of government is guided by the rule of law and it's powers are balanced between multiple branches of government that are to provide checks and balances on any one branch becoming too powerful. I will admit that our country has become more democratic over time. The 17th Amendment to our Constitution allowed for direct election of Senators in 1913. One of the major factors that led to this amendment was the influence of moneied interests in the State Legislatures. In order to remove this influence power was given to the people, more democracy was seen as the answer to this problem.
The history is all well and good, but, what form of government would an educated outsider think we had if he were just to watch how things actually work instead of through the lens of how they are supposed to work? It's definitely not a democracy since we don't vote for the president (electoral college), we don't have any voice in Federal regulations or laws, it would also seem odd to have a democracy where only 41% of voters showed up for the last election (2010). So, it's not really a democracy, even though we vote and most of the public thinks we live in one.
Perhaps then an outside observer would find that the constitutional republic originally enshrined in the US Constitution is the form of government we are still living under? Not likely. The first and most basic principle of this form of government is adherence to the Rule of Law. Since we are currently at war in Libya without congressional authorization and without having been attacked, the President has acted outside the War Powers Resolution. The United States Supreme Court, Citizens United v. Federal Election Commission, decided that corporations are people and that they have protected speech rights. This application of a citizens right to free speech to a legal fiction turns law upside down. Will corporations get to vote next? Not that they need to, this ruling allows them to spend virtually all the money they want to influence elections.
Which brings me to the next possibility. We live in a plutocracy. A plutocracy is a government by the wealthy and for the wealthy. 237 of 535 Federal Representatives and Senators are multimillionaires. Since the 1950's the top tax rate has dropped from 77% to 35%. Is it any wonder we continually run deficits? In the past 30 years corporate income has grown 100%+, CEO compensation has grown 300%+, and average workers salaries have grown 3%.
In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). Site
If you think that "grass roots" organisations like the Tea Party are working to solve this problem you are sadly mistaken. The major financial backing of this organisation comes from the Koch brothers on their Koch Industries(worth about $24 Billion). These brothers, along with several other super wealthy families mentioned in this document have been spending millions to influence the government.
If the recent events in the Middle East are any guide, the rulers of this country won't do anything but continue what they are doing. It will be up to the people, when we finally have had enough of giving up our rights for false security, giving up our lives for unlawful wars, when we finally get sick of working harder and longer for less and less, then, maybe, there will be a change.