Define "the system"?
Educational? Political? Financial? Judicial?
The two-party political system hasn't broken America. The system has worked for hundreds of years. The U.S. Constitution is not broken. The idiots (both parties) that wipe their collective asses with the Constitution are broken. If you delve in far enough, what you're seeing play out could very well be an accelerated decaying of society (especially civility) in general. There is a very good reason they're called Generation Entitlement and Generation Nothingness....but if that's the case, then the senior ranking politicians in the country could easily be called Generation Clueless.
I'm referring to the political system. The other systems kind of tag along.
What you're saying could very well be the case. But it's really hard to measure and define how a society decays. The living standards we've got today is in an another dimension than compared to 60 years ago but at the same time we feel like the world is going to shit.
Why I doubt the two-party political system is the best you can have is because it causes a lot of political constipation. I definitely get a lot of Us vs. Them vibes from Americans(kind of like two grumpy old men that known each other for 60 years and refuses to have any meaningful dialogue) whereas where I come from people are more focused on the issues themselves rather than flinging poo at one another... because no one party can be in power without co-operating with at least two more parties.
Whenever I watch american news(especially Fox) I get reminded of the newscasts in totalitarian states. Us vs. Them. The other side is always evil and delusional. The other side is always wrong. You're not a patriot if you disagree with this. Etc....