The most glaring example is our dysfunctional government. Regular readers know that I tend to blame the conservatives for this, but there's plenty of blame to be shared. In principle, government is the means of maintaining a functional society. Maintaining the rules (laws) and ensuring the basic services (roads, etc.) while providing security (military) for the populace as a whole. But politics is sometimes the enemy of good government, and the struggle to hold power has reduced the focus from substance to image. The goal has become re-election rather than achieving solutions to problems.
The most recent example, the health care reform debacle: the problem is rather simple; over 3 million Americans lack access to health care, and roughly 45,000 per year die as a result. So a simple solution would be to create a program to provide health care to those people (yeah, that's the public option) efficiently. But that's not the way our government works. Instead, corporate lobbyists spread millions, and partisan hacks spread misleading talking points in order to enrich themselves. We're told that real reform is "impossible"; we lack the competence to provide working health care for all (despite the fact that the rest of the modern world seems capable of doing it.)
This country needs a modern energy infrastructure, not the fifty year old system we currently have. Even if you want to deny climate change, what's so bad about reducing pollution, energy costs, and dependence on foreign oil? And the technology to address the problem is readily available. Here's one simple example: look at all those long distance overhead power lines, and realize that they lose 8% to 25% (depending on distance and age) of the electricity passing along them. Simply replacing them with modern insulated lines would bring the loss down below 2% (and create a lot of jobs; replacing that much wire is rather labor intensive), saving the country billions annually. While the project wouldn't be cheap, it's a hell of a lot cheaper than invading Iraq. But we're too incompetent and complacent to take up such grand projects. It's the same in alternative energy: we're falling behind Europe and Asia in wind, solar, geothermal, and tidal energy generation. A wind farm being built in this state will use windmill generators built in China. Why? Because we "can't" manufacture them here.
America has the largest, most powerful (and most expensive) military in the history of the planet, but after eight years we are still stuck in wars with no "victory" in sight. I admit that because our war is with a verb, "terror", it's hard to know what "victory" would be, but one would think that after 8 years and roughly 1.5 trillion dollars, a competent military would be able to defeat a small group of fanatics. America isn't even competent at war anymore.
I grew up with a certain ideal of American greatness; "exceptionalism" if you wish. Forty years ago, we put a man on the moon. We can't do that now. We built the greatest cars, the finest machines, and the most innovative technologies then. Now we build celebrities, although most of them do nothing worth celebrating.
As American industry is dying, we're spreading billions of bytes of information across the internet every hour. But it seems that most of it is spent spreading "LOL cats" and such, rather than building anything. I suppose that's something; we're still competent at entertainment. America may be dying, but at least we'll be amused.
This probably sounds like the grumblings of a grouchy old man about the "good old days", but it's not meant to be. The "old days" had plenty of problems; the difference is that we had a belief that we were competent enough to solve those problems. That belief seems to be gone now. Now we believe in all the reasons that we can't solve problems.