Before I try to answer your question, I will look at the good. Everything dies and all empires fall. That is the way of life. But whatever survives is stronger. Mass culture is dead, but the democratization of culture has taken its place. Art and culture do not die with mass production. You just have to dig a little deeper to find it. I think most of the best music, TV, and movies ever made have been in the last 10 years, but most Americans haven't heard of half of it.
Now the executive summary of my answer, in convenient bulleted list form.
- Overextended military fighting in places most people can't find on a map. (didn't that ultimately destroy the Roman Empire?) Our military budget is roughly equal to that of the entire rest of the world combined, and is now largely financed through deficit spending.
- Increasingly undemocratic and poor leadership (also see Roman Empire), which now seems to serve not people but corporations
- Debt—personally and nationally, we just can't control our spending. We want it all (including the weapons) and we're willing to sell our future to get it.
- Globalization—now you have to compete with some guy in India for a job, and we've exported the means of production. MBAs, bankers, and lawyers do not actually produce anything, they just coerce other people into producing what they want. (is that the definition of power or what?) Not that I'm opposed to globalization in principle, but this is just a natural result of the change. Basically, it's a two-way street and we have certainly had the advantage until recently.
- Legal system—this is the most litigious society on earth, usually for the purpose of making money not actually protecting the rights of individuals or promoting innovation
- War on Iraq—No explanation necessary
- War on Terror—Not that we shouldn't try to prevent terrorism, but we're going way overboard with the fearmongering, trampling international law and civil rights while mostly serving government contractors rather than actually stopping terrorists.
- War on Drugs—let's spend hundreds of billions of dollars fighting something most people who want to do are still doing anyway and destroy civil rights in the process. I can't think of a better way to preserve individual rights in a purportedly open democratic society.
- The prison-industrial complex—We have the highest prison population rate of any country. Largely due to the War on Drugs, the basic goal here is to put people we don't like in prison for the longest time possible, but it does nothing to rehabilitate prisoners into productive members of society.
- Religious idiots, who, among other indecencies, obstruct such basic knowledge as science and sexuality
- Loss of spirituality—The big organized religions are anachronisms or plain nuts, the new ones are too newage-hippy or outright illegal (see War on Drugs) for most people, where does the average rational person turn for this need? Money is the new religion but it doesn't serve the same ends.
There is still hope. We could end most of that today with rational thinking. Not that I'm very confident in that happening, but we'll either figure it out or continue to wallow in the bad results.