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Minority viewpoints rarely get well represented in the two party system. Some would argue that's why Europe is socially so much more inclusive and tolerant (at least in some ways) than we are in the US. The two parties cannot adequately or accurately represent 310 million people, they have to appeal to too wide of a spectrum to get elected. So more parties could not only bring more constituencies to government's table, but it could force the larger parties to acknowledge them and negotiate with them for a share of government.
I assume that you are asking what the problem of having only two parties is. If so, the major problem, I would say, is that the parties tend to look alike and act alike on many issues.
When there are only two parties, the two parties have to compete for the voters in the middle of the political spectrum. This is known as the median voter theory. In general, the people who are more conservative or liberal are stuck with one party and the parties compete for the people in the middle. You can see this issue arising for the Democrats right now. Liberal Democrats are angry because Pres. Obama has not been liberal enough for them. He has to be moderate to try to appeal to voters in the center.
When you have two parties, they both try to appeal to the voters in the center and so they tend to act pretty much alike. That is why, for example, the Republicans (who are supposed to be the party of small government) gave us a huge increase in Medicare spending in George W. Bush's second term.
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