The trench warfare between Democrats and Republicans in Washington occurs over a very small piece of land, and the Democrats have been retreating off of it for about 30 years. Little by little, the Democrats have ceased to represent working people and now only offer up tidbits of social policy to help the very poorest Americans.
If you had the misfortune of watching the latest Republican 'debate', you would have noticed that the party now exclusively represent corporate America, wishing to turn as much of the country into a low wage labor market as is possible while ensuring wealth is kept in the hands of the elite. Mitt Romney's recent gaffe that 'corporations are people' reflects the pervading view of society inside the GOP, and his opponents only offer up a more extreme vision of market capitalism.
Given the Republicans control Congress and are willing to severely damage the country in order to pass their policies (as we saw with the debt ceiling debate), the resulting political paradigm is so dangerous that the government no longer has the ability to effect policy. Key decisions are now left in the hands of private power who seek only their own profit at whatever expense. Obama and the Democrats are struggling to contain extreme excesses of corporate capitalism, but with dwindling political capital and less leverage inside the system after the mid terms, it is an uphill battle.
The cost of essentially firing the referee has made the game inherently less stable and far more prone to collapse than ever before. As Noam Chomsky points out, this could spell the end of the American Republic as we know it:
Another common theme, at least among those who are not willfully blind, is that American decline is in no small measure self-inflicted. The comic opera in Washington this summer, which disgusts the country and bewilders the world, may have no analogue in the annals of parliamentary democracy.
The spectacle is even coming to frighten the sponsors of the charade. Corporate power is now concerned that the extremists they helped put in office may in fact bring down the edifice on which their own wealth and privilege relies, the powerful nanny state that caters to their interests.
It is incredible that the Republican party is now so extreme that it actually threatens its own interests - a sign of how fanatical it has become under pressure from players like Sarah Palin, Michelle Bachmann, Rick Perry and the Tea Party. So unwilling are they to even entertain raising taxes, they would sacrifice the financial standing of the country to its foreign and domestic debtors. This bizarre irony would be funny if it were only the GOP's survival at stake, but their power over the political system and ability to pevert the national debate means they will literally bring the house down with them should the decide to continue the deadly game.