This is part 2, I would strongly recommend you read part 1 first...
The US Government was meant to be a representative democracy. In other word,"We the people" would select a handful of representatives who would act for us, speak for us, carry out our will. What we need to do is get back to that, and refine it.
What I propose is a distributed model of government. Actually, I really believe that this is what the founding fathers had in mind.
The fundamental unit of government is the family. Lets begin with that. The family as an autonomous governmental system. Simple enough. The next layer of government is the neighborhood. The families which make up a government should meet regularly. They should establish and codify their neighborhoods mores, discuss the present social and economic issues, and identify their position democratically. The results of their dialog are then taken by their select neighborhood representative and presented before a similar, city wide council (for very large Cities, it might be necessary to have one or two intermediate councils of city districts).
The City government goes through a similar process, after which the results are carried to the County government, the process repeats and goes to the state government. Finally the state representatives, carry the message to the federal level.
Now in this model, most of the action happens at the state and city level. The federal level of government serves primarily to coordinate the state activities, help in the establishment of standards needed to allow the states to interact effectively, and manage those things which must happen at the national level( management of the armies, national transportation and communications systems, and so forth).
The process might look something like this: Texas has 22 dry counties, 146 partially dry, and 46 wet counties (referring to alcohol. Dry counties prohibit the sale of alcohol, partially dry has some restrictions, typically based on alcohol content, and wet does not carry restrictions on alcohol sales). Assume one the neighborhoods in one of the counties proposes that the state should go completely dry. No more alcohol in Texas. The neighborhood representative takes the proposal to the city.
Assuming the other neighborhoods agree (perhaps a 2/3 majority vote), the idea goes to the county level for review. Unless the county level finds some obvious reason not to forward the proposal, it moves on to the State. The state government reviews the proposal, begins the risk/benefit analysis, and sends notification of the proposal down through all the country, city and neighborhood representatives. The state also carries the proposal to the Federal government, primarily as an information point. In this case, the Federal government might raise an issues of concern, perhaps liquor made in Mexico is being brought through Texas. How would this law impact that?
The issue is evaluated, neighborhoods vote, the vote carries to the cities, then counties and finally to the state. The governments job then is to handle the process of information gathering, and dissemination, and then to enforce the will of the people.
Continuing this example, let's assume the vote came back at 95% of the population in favor of the proposal for Texas to go dry.The proposal as approved goes into effect in exactly two years, at which point all alcohol will be prohibited in Texas. To deal with the issue of transporting alcohol from Mexico to other parts of the US, an exception is made for Interstate 35, Interstate 30, and for the brief stretch of Interstate 10 From between Mexico and New Mexico, allowing trucks carrying alcohol, providing no stops are made in Texas.
What of the 5% that voted against? Well, their choice is to accept the position of the majority, or move to a different state.
There are a number of benefits to this strategy.
Reduced influence of special interest groups - It is one thing to lobby to a handful of representatives in Washington D.C. It is entirely another matter to lobby to the millions of neighborhoods in the U.S.
Reduced risk of tyranny - since governing decisions are made from the bottom up, there is no individual or small group in a position to force a questionable bill through the legislative process.
Progress - The distributed system more readily lends itself to progress. Rather then all positions being decided by two radicalized parties and their pseudo-religious principles (which generally leads to political stalemates), decisions are based on more local interest, need and observation. Decisions regarding how to best safeguard the northwestern wilderness, as an example, are made not by an east coast, urban college graduate, with a prestigious law degree and no practical western wildlife experience. Instead those decision are made by those who live on, work on, and use the land they are trying to protect.
The localized decision making will lend itself to greater variety of strategies in play as well which will allow for real, long term observation of the benefits and pitfalls. As one state discovers a strategy that works particularly well, that knowledge can be shared and implemented by the other states, tailoring to their specific needs.
Bloody revolution (normally) not required - Implementing this model is a bottom up, evolutionary process. Neighborhoods start working together as communities (How often do you talk to all the people in your neighborhood? Do you even know all the people in your neighborhood? They start attending and participating in city meetings. They start electing city representatives who get this model and support it. Those representatives start participating n the neighborhood process, and in the county meetings. And it slowly, quietly works its way up the chain of command.
What is the "downside" to this model? Everybody has to participate in order for it to be successful. Participation needs to be consistently in the range of Utah's 1968 Voting percentage (78.5%). That's really it. You'll have to work for it. And to be honest, considering the history of this country and those who founded it, if you see working together to make things better as a downside, you might have picked the wrong country to take up residence.