What's even more concerning, is that is only part of the overall problem with American politics. The power no longer rests with the people (as it should - afterall, you guys DO call yourself a "democracy", right?), but rather with those who have very, very deep pockets. Occupy-Wall-Street strike any bells? No, they are not mindless "terrorists", or people whose sole intent is to bring anarchy to the world. Their assertion of the 99% vs 1% is a bit of an exaggeration, but describes the situation pretty damn well nonetheless.
The term "democracy" has gone through some rather implicit changes in its definitions over the past couple centuries.... might as well call it an oligarchy/plutarchy now.
"the world's oldest surviving federation. It is a constitutional republic and representative democracy"
Federation being a union of partially self governing states
Constitutional Republic (aka Federal Republic). This is further emphasizes the division of state vs federal.
Representative Democracy is where it really differs. When someone says Democracy they usually imply direct Democracy which the USA is most definitely not. Representative Democracy is our retarded Electoral college system where we vote for people to vote for us.
I think CPGray explains pretty well what's wrong with the voting system and why the electoral college is screwed up: