Well I wouldnt say laissez faire is the best way to go, but the government is definitely too hands on consider how massive and diverse a country we are. What the feds try to do is balance things nationally rather than regionally, which is how any government intervention in the economy should be done.
And I definitely agree that our method of representation is limiting itself. Though going fully democratic wouldnt really help, the majority cant be trusted to make the best decision, especially not with the influence the general media has on the views of the average American. If only people were more greedy. Then we would actually care about getting people into office that represented our views on what truly matters, which most people dont understand. I guess though that its not so much the system that is flawed, but rather the people, who dont care to know enough to make the right choices.
I think the fundamental flaw with a representative government (or any degree of democracy for that matter) is that it relies on people actually knowing what is in their best interest, or at least having a very vague idea of it, most Americans I would say are hopelessly misled, and I dont even know for sure that I am not among them.