July 2, 2013 (Updated July, 4, 2013)
The revelations of the past month have shone light on system of suspicionless global and domestic surveillance so pervasive that George Orwell would have been stunned. All electronic communication whatsoever is stored and analyzed. If “red flags” are raised in the analysis, or if suspicion is raised for other reasons, then a closer look may be had.
PRISM allows a target's communications to be surveilled in real time. This is made possible by the complicity of the largest internet service providers. It says when a person is logged on, what sites they visit, who they are talking to and what they are saying, and more. Exactly what is available varies by provider. Collection begins the moment an analyst makes the decision. Retroactive permission is then obtained either by FISC or by a S2 FAA Adjudicator, in the unlikely event of a denial, collection ceases. It remains unclear what happens to communications that were collected in the time frame between analyst's collection and the denial. An attempt is made not to collect data on US persons, nonetheless, any incidental collection from US persons is mined for intelligence, and may still be passed on, unredacted, to the FBI or CIA.
The gap in the data on US persons is filled by an intelligence sharing agreement known as the Five Eyes Alliance, consisting of the US, Canada, UK, Australia, and New Zealand. Member countries in this agreement pass data to one another. Thereby bypassing the Fourth Amendment as well as any local laws forbidding domestic data collection within the other member countries. The UK's project Tempora collects data from over 200 fiber-optic communications cables. The entire contents of which (phone calls, email, chat, etc) are stored for a period of 3 days, and the metadata for another 30. Its capabilities are continuously expanding. To quote LT Gen Alexander of the NSA “Why can't we collect all the signals, all the time?” In addition to the Five Eyes Alliance, treaties and intelligence agreements with other countries and likely with corporations as well.
The next major piece of apparatus coming online soon is the Utah Data Center, also known as the Intelligence Community Comprehensive National Cybersecurity Initiative Data Center. Estimates on its capacity vary, but it is suspected to be in the yottabyte range. It has the capacity to store forever, every bit of signal intelligence, (email, fax, video, voice, chat and more), ever collected, anywhere in the world. With room to spare. It is also to be used for decryption of all enciphered content on the Internet.
Suspicion can be determined simply by algorithm. Using certain programs that are popular abroad, but not in the States. Communications that are encrypted are nearly guaranteed to be stored, indefinitely, in the NSA's servers. A person may be deemed suspicious simply by communicating with someone who has communicated with a suspected malefactor. This brings up the Oracle of Bacon: did you know that over 300,000 actors are within two degrees of separation from Kevin Bacon? Similarly large numbers of total innocents are a mere two degrees of separation from each suspected malefactor. 
The Foreign Intelligence Surveillance Act (FISA) was intended to check the abuses of the prior years. A secret court was set up, with judges who have a top security clearance. It sounded like a good idea at the time, and it was. But there are serious deficiencies: it is entirely ex parte, only the government gets to speak; and only the government has the right to appeal, first to the Foreign Intelligence Surveillance Court of Review (FISCR), and then to the Supreme Court. Three chances for a “yes.” The batting average is 99.97%. It is remarkable to note the opinion of General Hayden: he said that, rather than being proof of a rubber stamp, it was an indication that they didn't press the court hard enough. He did not lie, and he not mistaken. Given that the court allowed the FBI to obtain the call records of every American, it is terrifying to contemplate just what else the court would have allowed, had only they asked.
The Patriot Act section 215 allows the FBI to demand “tangible things” without ever showing probable cause, reasonable suspicion, or anything else. It further prevents the recipient of section 215 orders from disclosing them to anyone. And the target of those orders will NEVER be notified. This is what law allowed the FBI to demand on an ongoing and daily basis, the call logs of all Verizon customers. Such bulk collection of “metadata” is not limited to call logs; all parcels, postcards, and envelopes of mail have been photographed and the images stored.
Challenges to this law have universally failed because of the inability to prove the surveillance and its consequences. There are further dangerous erosions to the Constitution set by recent court cases. Just the mere exercise of the Fifth Amendment may be used as evidence of guilt in trial (Salinas v. Texas). 
And these laws do have grave consequences. A person could be placed on a Terror Watch List without having any idea how they got on it, nor any ability to challenge it. This places severe limits on a person's freedom of movement, and even future employment prospects. Beyond the laws we have dangerous policies, indefinite detention without charge, years languishing in jail awaiting trial, “enhanced interrogation”, “extraordinary rendition,” be declared an “enemy combatant,” or even the possibility of being murdered by drone aircraft.
Revealing this isn't doing any favors to the Jihaddis. They have been using extremely strong encryption, throw away accounts, TOR, and virtual machines for years. We are not having great luck catching the non-Luddites by purely electronic means. 
Our present policies, however, are helping the enemy. The mere use of words like “enemy combatant” and the use of military tactics allows the terrorists to call themselves soldiers. They are allowed to see themselves as legitimate fighting force. And justify their crimes as “collateral damage.” And we are letting them. We are giving them a political and moral edge that they do not need to have.
Despite all this, there are bright spots. The existence of a Civil Liberties Protection Officer, policies to mitigate the damage to US Citizens, and internal resistance to the worst policies. In 2004 there was a full-scale rebellion led by Comey, when John Ashcroft was on his deathbed (he got better). Ill as he was in hospital, Ashcroft took a stand against something very dire. The exact nature of this isn't known. But he made it clear; “if I die, Comey is in charge.” And it is possible to wake up from even a very dire Orwellian nightmare. East Germany, and the old Soviet Bloc did just that. Change is possible.
An informed and active public is absolutely necessary to overcome our situation. But it is possible. Good and brave people still exist. Even within government. Even in the Opposite Party. We must become engaged, and also engage those in power.
The dangers are these: conspiracy and rumors are kings when the truth is unknowable and those who do know the truth lie. This perpetrates a climate of fear. It would only take a few of the wrong people in the right positions to turn the systems designed to protect us into a weapon of oppression.
There is a better solution. Terrorism thrives in places where the greatest injustices exist. Where there are few better options. Where a person may sign up with the Jihaddis just to put food on the table.  We must have a just society, and promote it worldwide. We must deal with our neighbors honestly and fairly. We must stop treating Jihaddis as a legitimate fighting force and sic the justice system on them. Open and fair trials for their crimes. The world must see that they are criminals who commit murders, rapes, and kidnappings, and to join them makes you a criminal, not a soldier.
We are facing the possibility of becoming an Orwellian society where the people are always afraid. And have no rights. But it is NOT inevitable, if we push hard enough, long enough, for real reforms and changes we may yet prevent it from becoming a reality.