The US Federal Government has the famous "Checks and Balances" system in play. Rather than strictly partitioning the three branches, each branch has a certain amount of power over the other, usually in the form of stopping the other branch from doing something. Many State and lower governments are also built on this model, to one degree or another. (I would imagine it's most or all state governments, but I don't know enough to say that.)
These use of these Checks and Balances is not a sign that our government is failing or a signal of the Immanent End of Democracy. It's the normal functioning of our Government.
Legislative branch passes unconstitutional law -> Judicial branch nullifies law is normal. Yes, in theory our Legislative branches shouldn't be passing unconstitutional laws, but a system built on depending on that would be naively Utopian and not work. This happens all the time and is probably the most frequent thing that gets into the news, along with refinements like partial nullification or re-interpretation.
Bad Judicial decision -> New Legislative action is the system working as designed. Many people, including me, believe the Kelo decision granted the government too much power by poorly interpreting the Constitution. But that wasn't the end of Democracy as we know it; instead, many State governments quickly moved to clarify their own eminent domain laws in a beautiful display of Federalism.
What is actually bad is when bad law gets past all the branches. Certainly this happens, although we may disagree on what exactly qualifies as such a "bad law". (In the spirit of this post, I'd prefer a definition based on poorly reflecting the choices of the people or having concretely bad effects, rather than one based around "I don't like it"; per the previous myth, "I don't like it" is not proof of failure either.) When this happens, yes, it's bad. But all three branches acting stupid in concert does happen less often than any single branch acting stupid. And that sentence, in a nutshell, is why checks and balances are so cool; on average, when one branch checks another branch, something stupid is stopped.
(The cynic in me is compelled to claim that's because on average, when a government acts, it's stupid, so how can you miss...)
This is a late entry to my Government Myths series.