What is liberal democracy? It is characterized by a belief in the wisdom of the crowd, optimism that the truth will prevail in the long run if the playing field is reasonably level, tolerance of opposing viewpoints, and the understanding that, no matter how wise you are, you may be wrong. It attempts to balance the power of the majority with individual rights; it believes that government should be limited, and arbitrary treatment of anyone prohibited; and it rejects any attempt to impose ideology on anyone’s conscience. It is largely coterminous with the Bill of Rights.
Liberal democracy is not an attempt to dictate the size of the state; it is compatible with both large and small welfare states. While it has been, on the whole, good for economic growth, it revolves around individual rights and happiness, not GDP.
Is liberal democracy failing in the US? Not if you ask its greatest American enemy, Donald Trump. While some members of the New Right explicitly oppose both liberalism and democracy, Trump insists that his political opponents used illiberal tactics against him and his followers and argues that he is just restoring the necessary balance to the system. That’s complete BS, of course, but it shows that he lacks the imagination and the nerve to advocate for a different system, unlike some of his more intellectual supporters.