The point of a law is to discourage people from committing certain actions. Alas, this does not mean that people will automatically follow that law, which is why our system clearly specifies consequences for when a law is broken. Fines, jail time, whatever... the point is that just because we pass a law, that doesn't mean we assume everyone will follow that law. Indeed, we know they won't, which is why we set up various forms of punishment and rehabilitation.
On a more systemic level, our country operates with a set of limited governance. The power is split between the federal and state governments, with the federal government further divided into three branches including an independent judiciary. Going even further than that, this power is granted to the government by the people, and we submit to it voluntarily. We don't give away this power unconditionally though, and as such, we have clear ways with which to express our displeasure with the government's actions. Our Founding Fathers had a deep distrust of government; they believed that any excess power that a government has will eventually be abused, so they made it very clear in our Constitution what the government was permitted to do and what it was forbidden to do.
However, just because the government is forbidden to do something doesn't mean it won't do it, similar to how laws do not imply a complete cessation of the acts they forbid. Indeed, that our Founding Fathers clearly laid out methods to remove those in power implies that they knew that power would be abused. They divided the powers granted to our government because they knew that individuals in the government would attempt to abuse that power. They further provided the people with direct and indirect ways to correct any problems with the government.
This is an example of what is called fault tolerance. The idea is to make a system robust enough so that variations in use or a chance of component failure won't cause the overall system to crash. Generally this is achieved by introducing a certain amount of redundancy into the system or perhaps allowing a system to fail gracefully. In a system that is fault tolerant, when some component fails, a backup component kicks in and the system continues to operate at acceptable levels while the initial failure is corrected (obviously, its more complicated than that, but you get the point).
The American system of governance has shown a lot of resilience and flexibility in its history. Part of this is due to our inherent freedoms. Freedom of speech, for example, has the fortunate attribute of allowing dangerous people make fools of themselves. "No free speech produces Hitler. Free speech produces David Duke." (I don't remember who said that, but its a good line:) Our system is not devoid of abuses of power (component failures), but we have shown on many occasions that these abuses of power can be worked out within our system.
The 18th Amendment provides us with an excellent example:
After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.There is a lot to be said about this, but what it comes down to is this: The 18th Amendment was essentially infringing upon our natural rights (which are inherently protected by the 9th Amendment). It ultimately destroyed more liberty than it created, and it was completely incompatible with the basic concepts of our system. It is also the only Amendment that's ever been repealed (by the 21st Amendment). One of the things we found out during the course of Prohibition was that, on a practical level, the government was incapable of enforcing such a thing. Ratification of the 18th Amendment formally granted power to the government to implement Prohibition, but that didn't stop people from drinking (Rex Banner: "What kind of pet shop is filled with rambunctious yahoos and hot jazz music at 1:00 in the morning?" Moe: "Er, uh... the... best damn pet shop in town!" Crowd: "Yeah!" Heh).
Another example of the strength of our system is Congress' power to impeach and convict a President, removing him from office. The official criteria for an impeachment is "treason, bribery, or other high crimes and misdemeanors," but in practice an impeachable offense is whatever Congress says it is. When it became clear that Richard Nixon had committed an egregious crime (obstruction of justice), he stepped down to avoid being prosecuted and there was a peaceful transfer of power as defined in our system.
The 18th Amendment and the Nixon scandal are examples of component failures, but also of systemic success. That they were able to wrong the nation does not imply that our nation as a whole has failed. Our system is explicitly designed to handle such failures and though it may not do so perfectly (or very quickly), it has done so adequately in the past and it appears to be in working order now. It also has mechanisms built into it that allow us to improve upon the system itself. Of course, I suppose it is possible to pervert those same mechanisms to degrade the system. The "War on Terror" is shaping up to be a long one, and while what we're seeing at the start is a lot of potential abuse, that doesn't mean we're headed towards a totalitarian state. Ironically, a sure sign that we are headed down that road would be if we could find no examples of abuse, as that would mean our government is acting perfectly. And we all know how likely that is.