The two party system is enshrined in American politics because there is no other possible mathematical outcome given the voting system. For an eyeglossing acount of this see "An Economic Theory of Democracy" by Anthony Downs. Downs makes one big assumption however, that is that political issue space is only two dimensional (i.e. left vs right). As many of you are aware of the political compass website you can see that political issue space has perhaps more dimensions than just two (left and right on the horizontal, libertarian and authoritarian on the vertical). I say perhaps because even on that website people tend to be distributed along a diagonal line from the lower left corner to the upper right (with a few honorable and notable exceptions). So as long as most people roughly fall along this diagonal line, then we will have a two party system. The time is ripe for a shakeup in the system when most people fall off the existant line into the other dimension.
For example: traditionally the left (Democrats) are seen as fiscally liberal and socially liberal while the right is fiscally conservative and socially conservative (sadly given recent Republican behavior I can no longer say the right is fiscally conservative with a straight face. I have taken to calling them the "slash and spend" Republicans to go along nicely with the stupid "tax and spend" Democrats. But at least the Democrats understand that you have to raise income to raise spending.) Anyhow, a case can be made that most Americans are fiscally conservative but socially liberal (i.e. they would prefer for the government to spend responsibly and not tax very much but they would also prefer for the government to stay the hell out of their bedrooms and for it not to tell them what to do with their bodies). Thus the time may be right for a break in the two party system. The Democrats have tried to adopt to this social left fiscal right with the Democratic Leadership council and the so called New Democrats who are really quite fiscally conservative (for Democrats) while still retaining their social liberalness. I don't really see any such equivalent group on the Republican side. The moderate wing of that party as represented by John McCain and Jim Jeffords and Olympia Snow is pretty much dead in the water with very little power at all (Jeffords had to bolt the party). I would love to be contradicted on this point though. I would respect the Republicans a lot more if I saw any sort of moderate influence in their caucas at all instead of everywhere you look seeing narrow special interests being represented. (this Last point of course shows my personal bias...
I was going somewhere with all this long winded sillyness. Oh yeah. Before we go rushing off to fix the two party system by making it more representative, we have to ask the question is that actually a good idea? There are important protections for minority peoples and parties in the current system. I am afraid that one unavoidable side effect of making the system more representative is that we take a step closer to the "tyranny of the majority". Which the founding fathers were also very much afraid of and to my mind for very good reason. Pure Democracy has some pretty big problems.
Anybody who's still reading... Cheers!
Teal