Not that it was ever a true democracy, but for most of our history, the U.S. has at least kept a semblance of a functioning democratic republic. That's about to change in a big (and permanent way).
Many seemingly unrelated trends and/or social and economic disruptions are indeed related. They are the result of a well-orchestrated strategy by a very small group of ideologues who are motivated by neo-fascist instincts based on a world view highly influenced by the philosophies of people like Leo Strauss, and Ayn Rand (Please read about Ayn Rand's influence on people like Alan Greenspan).
This effort to basically take over the levers of power in the country has been led by organizations like The Heritage Foundation, co-founded by the late Paul Weyrich, who also co-founded (or play important roles) in organizations like the corporatist right wing group, American Legislative Exchange Council (ALEC), and the religious right wing organization, the Moral Majority.
“When fascism comes to America, it will be wrapped in the flag and carrying the cross.” - Sinclair Lewis, It Can’t Happen Here.
It already happened. For a greater perspective, please also watch the documentary "Inside Job".
The economy will continue to deteriorate (mainly due to the ongoing and worsening housing crisis). There will be a major (and catastrophic) economic collapse which will mainly affect the poor and the middle class. This is very similar to what happened with the prelude (of what's to come) of the 2008 world financial crisis, where virtually all the top executives who caused it walked off with an aggregate hundreds of billions of dollars (after having brought the world financial system to its knees).
This thesis (which I'm making a hard prediction) was addressed very aptly by Naomi Klein in The Shock Doctrine.
In a very simplified form, the philosophy behind this upcoming reality is influenced by Social Darwinism, Eugenics, and hard-right religious fundamentalism (which takes advantage of puritanical thought).
Understand something... The Wall Street collapse was a dry run for what's to come. These people devised a system whereby, in destroying their own companies, they benefited greatly. They were able to create a system whereby the profits flow to them, and the liabilities and losses flow to you (the citizenry).
That was the dry run. In the larger scale (that's to come), by creating a national shock via a (catastrophic) economic collapse, that will create the conditions whereby the very fragile, the very poor and vulnerable, will either die, live in squalor, or be incarcerated.
The rest will be in such fear of finding themselves in that situation that they will become slave-like subsistence-level workers.
This in turn will allow the neo-fascist plutocrats to consolidate an incredible amount of (more) wealth and power, and then use the entire world as their financial playing field. Something similar will happen in Western Europe (do a little reading on the massive protests in Britain, Greece, Spain, and many other countries).
Regarding the current political situation in the U.S., I have two theories. Either Obama will adhere to this philosophy I describe above, (although I'd like to believe he doesn't), or, perhaps once he came to power, he realized that it was already too late to do anything about it and he decided to play within the system and see what he could do to soften the blow on the citizenry.
If after assessing the situation he realized that the criminals that created the current financial collapse could (with the proverbial push of a button) create an even greater catastrophe without them being affected one bit, he could've determined that it was better to play along and buy some time.
This could explain (to a certain extent) why his government is filled with Goldman Sachs alumni (and other culprits of the 2008 financial collapse). Please read Matt Taibbi, and watch "Inside Job" for a better perspective on this.
As I mentioned in one of my previous diaries, "It's Official: A Corporatist Police State", the repressive infrastructure is already in place and is now being slowly deployed.
The individual is handicapped by coming face-to-face with a conspiracy so monstrous he cannot believe it exists. The American mind simply has not come to a realization of the evil which has been introduced into our midst. It rejects even the assumption that human creatures could espouse a philosophy which must ultimately destroy all that is good and decent. - J. Edgar Hoover
These things are going to happen, and are happening. It will become clearer as weeks, and months, go by.
The question is whether there is going to be an effective organized resistance. I hope there will be, but I doubt it. It would require a massive awakening. And with the deployment of the most effective propaganda machine the world has ever seen (in the form of the U.S. mainstream media), I just don't see how people can be awakened (in mass) to resist this final takeover by these monsters.