|. . . kind of.|
Not only are the two parties failing us, but the two-party system itself, regardless of which parties are in control, is failing us. It is a system which actively suppresses diverse ideas and candidates and thinking-outside-the-box, which results is less choice and less democratic representation for Americans.
The 2000 presidential election is an apt illustration of this problem. More people voted for Al Gore than George W. Bush, but Bush became president of the United States. So you have a situation where the president of the United States did not garner a majority vote of Americans. This might be attributed to two major factors. First, the electoral college and, second, the presence of Ralph Nader.
As to the electoral college, there's not much else to add. It is archaic and anti-democratic and nonsensical and needs to be done away with.
As to the presence of Ralph Nader, he actually did end up taking enough votes away from Al Gore in Florida to flip the state in Bush's favor, thereby turning the election. I imagine that most of the people that voted for Ralph Nader would have had Al Gore as their second choice, but by voting their conscience and refusing to vote strategically (which I applaud), they showed how a multi-party system fails. Many people were afraid to vote for Nader because of how it might have skewed the election in favor of Bush. The two-party system, then, suppressed the valid concerns of Nader-ites, and any other potential third party, because there is only room for two parties. So how to fix it?
There are actually different and better ways to run an election than simply marking an "X" next to the name of the person you are voting for, often referred to as Plurality Voting. This is the system that punishes third party candidates and skews the entire process like what happened with Bush, Gore, and Nader. It seems weird to conceive of a different way to elect our government at first, given that we have voted in a certain way for so long, but it is nonetheless true that better ways exist. Much better ways.
One better way to run an election for an executive office is called Instant Runoff Vote. Under this system voters rank their preferences one through however many candidates are on the ballot. If no candidate receives a majority vote right off the bat the candidate with the fewest votes is eliminated and the second choices from that ballot are distributed amongst the remaining candidates. This process is followed until one candidate has a majority. Under instant runoff voting, the person elected always has a majority and there is no punishment for third-parties (or fourth, fifth, etc.)
That's simple enough, but the more difficult issue is the problem with voting for legislatures, councils, and the like. Imagine a state where 40% of the people vote for candidates from Party A, 35% vote for candidates from Party B, and 25% vote for candidates from Party C. Also imagine that the party makeup is the same in each individual district. In this case even though Party A only makes up 40% of the electorate, they get 100% of the power in the legislature. The dominant party, then, generally gets greater representation in government, and thus more power, than they proportionally receive among the electorate.
There are several methods used in different American cities and states, and federal elections in different countries, that fix this problem, all of which try to attain the most fair way to achieve Proportional Representation. They are all more complicated than the system we use now, but much more fair and representative of the electorate. Choice Voting is similar to IRV in that voters rank their preference of candidates, and second and third preferences are redistributed until all the seats are filled. This requires that the seats be at-large and that candidates obtain a threshold of votes to be elected according to the Droop Formula, which is the number of votes cast, divided by the number of seats available, plus one.
Mixed Member Voting has the voters cast two votes: one for a specific candidate and one for a party. In this method, the party receives the number of seats proportional to the number of party votes it gets. The seats are filled first by those that win the specific candidate vote and the rest filled by the party.
Party List Voting is where parties order a list of candidates and voters just vote for their favorite parties. The seats are filled by the parties according to how the proportion of the vote they receive in the order the party ranked the candidates.
These are very basic overviews of the systems, and there are different variants for each one, but the overriding concept is that they all do a better job of representing the diverse and complex political characteristics of the public than our current Plurality Vote system. They allow for more voices and more ideas, which inevitably leads to less political stagnation and fewer stale ideas to fix problems.
As an example of how this might change things, let's take a look at good old Utah. To get an idea of the general proportion of Democrats to Republicans in the state, I took the results of the 2010 governor's race between Peter Corroon and Gary Herbert. Herbert won 64-32. A two to one margin is probably about right. The state senate, meanwhile, is made up of 22 Republicans and seven Democrats, which is a 76-24 split. The state house of representatives is made up of 58 Republicans and 17 Democrats, which is a 77-23 split. In both cases Republicans are over-represented compared to the electorate. A Proportional Representation system would correct this problem and lead to something like a 19-10 split in the state senate (a pickup of three seats for Democrats) and a 51-24 split in the state house (a pickup of seven seats for Democrats).
This isn't even factoring in the increased opportunity for third parties, which would change the political landscape even more. And this is just a liberal whining about Utah and the 2000 elections, there are plenty of conservatives that would embrace a Constitution Party or Libertarian Party if they had the chance, and I would welcome that. More parties, more ideas, more choices, more democracy.
The last few years have made it clear that democracy in America is weakening drastically. There are many good ideas for how strengthen it again, and changing the way we elect our officials is perhaps one of the most important. It is also the least likely to happen because it would mean that the parties in control would voluntarily weaken themselves and give away power, and as we know, "We have learned by sad experience that it is the nature and disposition of almost all men, as soon as they get a little authority, as they suppose, they will immediately begin to exercise unrighteous dominion."