It would, of course. Just look at some European democracies that lean heavily towards socialism. Excellent universal healthcare, schooling, civil rights (yes, economic systems are orthogonal do state systems) and so on.
What really endangers the US is the rapid erosion of civil liberties under the excuse the country is under attack. It is, but if the medicine kills the patient, it is not exactly a winning scenario.
You would call a soldier a traitor if he gave a nuke to Al Quida right? Yet America would survive. Without capitalism, America would not.