In the imaginary, democracy poses the possibility of a return to the original (apolitical) condition of human existence: a world without signification, a world without politics, a world where the natural unity of the people guarantees political harmony. For example, people do not identify with democracy out of some hope that it will temper or humble their own identity/perspective: the allure of the democratic is that it offers the possibility of the projection of the self into a kind of universal, the ultimate form of self-affirmation. This is what explains the allure of democracy rhetorically, at least for both E. Burke and Arendt in On Revolution.
The messy world of the symbolic, the compromise formation that testifies to the utopic position of the imaginary, emerges as the other side of the logic of self-projection that drives the rhetorical appeal of democracy: the pluralistic and difference riven conception of "the people" that functions as a universal to gain adherence also stands in for "persons". Nothing new here: this is a fancy way of describing the Platonic charge of demophobia, although we might say in addition to the Platonic worry that "the people" might run roughshod over truth, there is an additional issue built in at the simplest level of identification: the existence of the other "selves" which goad one initially to attempt to project the self as a universal that founds the political, not only frustrates that full realization of identity is simultaneously threatens the self with the secret truth that the self is never so whole as it seems (again, basic Lacan).
Now so long as what frustrates the full achievement of a pure people as sovereign is a split within "the people", you get your purges and your scapegoating and your democratic what-have-you, following Arendt, K. Burke, Stavrakakis, etc. Each attempt, once more, to purify the people struggles to identify the conditions of its own failure in anything other than a kind of bizarre inductive: we elevated "the people" to the position of power, problems persist, we must have picked the wrong "people". In this case it seems clear that we can dredge up the old familiar Copjec discussion: "the people" are being taken in for their failure to live up to their ideal image.
Alternately, we'd like it if "the people" could be appreciated as they are, what they are, in and of themselves. So it becomes a question of how we produce a kind of political "sense" or "atmosphere" or "mood" or "affect" that positions democratic subjects with a kind of skepticism not towards "actually existing" democracy but instead to its authorizing imaginary force. This is extremely difficult: as said earlier, few if any modes of identification operate by behaving skeptically and cynically towards the self, authorized as they are typically by a differential equation premised on exceptionalism.
So it seems like the genius of republican representation (and the further checks and balances in the American system of separation of powers) is that it provides a possible mechanism to produce skepticism towards any set of government actions as not being properly representative of the people: this makes a good deal of sense if your concern is with too much government power (like a bunch of Lockeans skeptical of the Hobbesian Leviathan sick of paying taxes to the King, or if you're a Jew who just escaped the state-run genocide of your people in Europe, like Hannah Arendt).
However, under the conditions of late capitalism, this virtue becomes a vice. To the extent that a pervasive skepticism of the people is built in to the structural political system, it reduces our capacity to understand popular demands as strongly authorized, demanding instead a kind of suspicion to these claims. So to the extent that the symbolic space of America is less and less tolerant of the welfare state, this reflects not only the neoliberal belief that governmental functions should be outsourced to private agents, but also the general fear that the government's actions are not what the people want. The republican theories behind American political institutionalism are built for an era where state power is the ultimate threat, and does not envision a world where the asymetrical aggregation of private property threatens the well being of the population.
So to the extent that democratic theory envisages a return to the original conditions of existence, those that are pre-political or pre-social, how does it compulsively repeat attempts to return to these origins? It seems like in a weird way the prepolitical character of democracy's offer of a pure people parallels capitalism's offer of a level playing field: both offer the annihilation of difference if you will only take one deshistoricizing pill. If the move towards a full "people" is desire, and if the drives are what break up that move (in this case republican institutions), then constitutive rhetorics demonstrate a kind of repetition compulsion in gesturing to a total and complete people that can never be completed. But instead of allowing us to locate this difference within the people deductively (compare this to the inductively violent result of the French Revolution), republican institutions locate this split not within the people but in the act of translating the popular will into political institutions themselves. Now so long as you have what Arendt calls the "revolutionary spirit", that is, a radical committment to the idea that every beginning can be a completely new beginning, this is perhaps not such a problem: institutions can be made again, and made in ways that their lack of selfsameness with previously existing institutions does not doom them to a failure by comparison. But when the totality of "the people" is regularly interrupted by institutions (and indeed, "the people" are constituted against the government in the style of contemporary conservative suspicion of governmental action), it seems that the repetition compulsion to summon "the people", if it is indeed an urge to return "to an earlier state of things", is nothing more than a reminder that the people are not the government.