First off, can we please stop using the term "two-party system"? Our system makes no allowances at all for any parties. They're not mentioned anywhere in the Constitution, nor are there any allowances made for any political processes at all other than dates for voting and vague dictates about states organizing their own election systems.
Parties are merely tools that we have invented as a means to organize ourselves. The fact that we have traditionally chosen to only allow two "major" parties at a time to vie for our attention/support is a reflection on us as a people and not our "system". Even the term "third party" is derisive and suggests that there should only be two; as if a "third" is somehow an anomaly.
Arianna quoted the brilliant P.J O'Rourke from an event that she attended where they debated this subject and I think that his comments are spot-on:
"Republicans and Democrats don't have ideologies. They just have these vague platform planks made of rotten wood of political expediency. If American party platforms were backyard tree forts, you would not let your children climb in them."
Then Arianna went over the litany of issues that a limited debate exacerbates:
Why are the too big to fail banks still too big to fail? Why is there still so little emphasis on jobs at a time when 26 million Americans are unemployed or underemployed? Why did our system recently fail us in three spectacular ways: the financial meltdown, the Upper Big Branch mining disaster in West Virginia where 29 miners died, and the BP oil spill in the Gulf?
On issue after issue -- education, our crumbling infrastructure, the rising costs of health care, the deficit, the steady decline of the middle class, foreign policy (where the two parties marched arm in arm into invading a country that did not after all have WMD or pose a threat to our national security) -- our current two-party system has failed us.
We definitely need new voices in our political dialogue. The media perpetuates a constant "A" vs. "B" narrative because it's cheap, easy and it has a nice hook. It's an ongoing soap opera that would get infinitely more complex and less inherently soundbite-y if 3 or 4 or even 5 groups needed to be included in any of their staged face-offs.
Most importantly, WE are to blame for this. We've let ourselves be brainwashed by the two major parties. We buy their line about how we can't "waste" a vote on somebody who doesn't have a "D" or an "R" next to their name. We nod our heads when somebody says that they can't vote for that level-headed Green/Libertarian/Reform Party candidate because they "can't win."
(Such a preposterous notion, that somebody on a ballot "can't" win. All you need is the most votes! And since when do we care more about backing somebody who "can" win over our desire for governance by people who we feel are most qualified and/or best represent our views and interests? It's just stupid!)
For all of our claims of loving a free market, we seem pretty content to let a bunch of political hacks impose lots of controls on the marketplace if ideas.
Kicking our addiction to just two parties will take a lot of work. Think twelve-step program instead of just waking up and smelling the coffee. Because while our "system" doesn't care how many parties we have (if any), our abdication of our responsibilities as citizens has let the "Ds" and "Rs" hijack our government and effectively choke off the avenues of opposition from any other organized groups.
Here's where we need to make some major changes:
1) Redistricting - This is the key to everything. So long as politicians who are beholden to their parties are in charge of the decennial redrawing of political districts, there'll never be a chance for other groups to mount a serious, sustained effort to break through. California's Citizen's Redistricting Commission is a great example of how this might be accomplished and the next 18 months will serve as a great test case of how other states might implement their own non-political system.
2) Elections - Abolish party primaries. The state should not be funding intra-party elections at all. Let them have their own conventions. What we need is a primary system that does not force people to choose which ballot they get to weigh in on when they go to the voting booth. During the first round, everybody who has qualified should appear on the ballot. The candidates with the top two vote totals then get to square off during the general election. "But what if the top two are from the same party?" you ask? Well, too bad. Who says that we need to have opposing parties squaring off? You think that there aren't enough ideological divisions within parties to provide for spirited debate in that scenario? (Hello, Tea Party!)
3) Ballots - While I would personally like to see party labels disappear from ballots entirely, I am a realist and understand that people like them and that parties DO serve useful functions. Sometimes. So instead of deleting parties from ballots, why not open them up to more? In Oregon last year voters saw a list of candidates with multiple parties listed next to their names. Parties who did not nominate or qualify candidates in the election were allowed to register their "endorsement" of candidates. This lets them participate in the process and lets voters measure the breadth of support (if any) from outside of entrenched parties a candidate has.
Yes, that was only 3 steps, but each one of them has lots of mini-steps. (I haven't done the math but hope that it averages out to 4 steps each, otherwise my "12 step program" analogy looks pretty dumb.) They'll take a long time to implement, and they'd have to be done state-by-state. And while in a time of economic uncertainty and relative decline in the US, this kid of reform can seem unimportant, it is, I think, the single most effective thing that we can do as a country to revitalize ourselves.