I do believe this country is a democracy.
To me, a democracy is a system where the people either:
a) Make the rules by majority (direct democracy), or
b) Choose "educated" people to make the decisions for the masses (representative democracy).
There is no denying our system has problems. Money and corruption are running rampant (just ask future ex-Representative Jim Traficant). Where there are people in power, there will always be corruption. Even in the best-designed political systems, there will be greedy people who will attempt to take advantage of the process.
The real threats to our democracy are not, however, money and corruption. I believe the biggest problems our country has are ignorance and apathy. People simply don't know and/or don't care what is going on in our country, and in our government. If people knew what some of the people in Congress are really like, and some of the things they do, I believe there would be mass outrage. But would anything happen because of it? Probably not. People simply do not take advantage of the opportunities of our system. When the voter turnout is at best 50 percent, the people are sending a clear message to our representatives that no matter what you do up there, we are not going to do anything about it.
A perfect example of both of these threats is the North American Free Trade Agreement (NAFTA). NAFTA, for those unfamiliar, is a document signed by the US, Canada, and Mexico designed to make it easier for companies to trade across our borders. In Chapter 11 of this agreement, there is a little provision of the document that people didn't think to look at before signing. It stipulates that if a local, state, or federal government signs into law a bill that can hurt the revenues of a company within the borders of these three countries, the country creating the law can be sued.
Here's an example. In California, environmental and geological survey groups were finding in their drinking water traces of a gasoline additive, which had leaked from underground pipes and storage tanks. This additive was known to cause cancer in laboratory animals. When this was discovered, the state government realized that as long as this additive was in gasoline, drinking water supplies were going to become contaminated. Realizing this, they passed legislation outlawing this gasoline additive. However, there is a company in Canada that makes the main chemical in this additive, and they sued the US government for almost a billion dollars for infringing on their revenues, and according to the document our country signed, the Canadian company has full rights to their lost revenues due to this local law that California brought up.
Many people do not know about this. When they find out about it, they often get upset or angry. But few, if any, have done anything about it. This is a perfect example of what is wrong with our democracy. There will always be money, corruption, and abuses of power. But it is our job to make sure that people who commit these abuses are thrown out of office. If we remain apathetic about this, the cycle will continue, and nothing will change.