What is needed is a proper, proportional representational electoral system. Get rid of the simplistic first-past-the-post counting and introduce proper proportional voting. This would get rid of the tradition two party system and introduce multiple parties.
America's voting system has two fundamental problems that tend to polarise its politics. The two major parties and the politicians elected tend to be further to the left and right than they otherwise would be. This also tends to polarise the population, who become driven by fear of one extreme or the other, or both. And no, this has nothing to do with the electoral college, which is a technical curiosity by comparison.
Both problems have obvious solutions that Australia already employs, which is why our politics is so boring and centrist in comparison. America is starting to employ one of them in places.
1) Optional voting
A consequence of optional voting is that politicians devote more energy to preaching to the choir, as there are far more votes to be gained by becoming motivational speakers, encouraging your supporters to actually turn up on election day, rather than chasing the middle ground of centrists. There policies also become geared to appealing to the more extreme left or right, rather than the centre.
From a perspective of pure self interest, voting is irrational. It takes some effort on the part of the individual to vote, and the lines in America don't make it any easier. Yet the likely payoff is zero.
Hence optional voting means voting by highly motivated idiots, and the politicians and their policies inevitably reflect this.
2) First past the post voting
First past the post voting tends to limit the number of political parties to two. It creates a perverse incentive for additional candidates to withdraw from the race, and for voters to not vote for minor party candidates, even if they prefer them. The two major parties come to represent varying combinations of more extremist influences from their side of the political divide.
Runoff systems, such as are used in Australia and France, get around this problem. As a result, Australia still has two major parties, but they are very centrist. The more extreme movements come to be represented by smaller, third parties, which are larger and more numerous than in America, better reflecting the diversity of voters views. This creates greater transparency. Everyone knows how popular a particular movement is by how many votes go to whatever minor party adopts them, rather than having the movement attach itself to one of the two major parties and trying to influence it from within in a far more opaque manner. The major parties can choose to adopt any policies from the minor parties if they are popular enough, but they still have to win over the silent, centrist majority in order to gain power.
America is starting to use the Australian alternative of instant runoff voting (preferential voting) in some elections. The American courts have already ruled it to be constitutional, so the only barrier is popular support. That is, ignorance. For some reason, Americans and everyone else tend to focus on the electoral college when it comes to electoral reform. This is a very visible problem, but merely technical, and fixing it would not achieve qualitative change. The two presidential candidates are still chosen by two enormous political institutions that are products of the current voting system and its flaws. These flaws affect congress, the senate, the presidency, and the two major parties.
Consequences
When considering the consequences of a naturally polarising voting system, people rarely look beyond who wins the election. However, what really matters is government and legislation. Focusing on who wins the election implies that the goal of democracy is fairness to politicians, rather than the public getting a real outcome that is supported by the majority.
Australians often get hung up on coalitions and minority governments, and whether a party 'deserves' to rule or not, and whether they deserve to rule on their own or be forced to negotiate with coalition partners. What they should focus on is whether the legislation enacted by this torturous process has the support of the majority of the population.
More polarised politics means bigger changes to legislation every time government changes hands. This is costly, both in terms of immediate cost as well as the consequences of political instability causing people to refrain from investing time or money in a venture or cause that might be affected by future changes. Some significant policies literally change immediately every time the presidency changes hands, for example whether foreign aid is allowed to be used for family planning. More fundamentally, legislation ceases to reflect the will of the majority.
Less attention to actual solutions & more to slogans? (Like it's not insanely bad now.