While Republican candidates are scrapping it out in South Carolina, the powerful re-election machine behind President Barack Obama has already set a pace of fundraising almost certain to shatter records for the sheer amount of money flowing into American politics.

Obama's campaign, called Obama for America, and the Democratic National Committee, the governing body of the Democratic party, together brought in a staggering $220m (£141m) in 2011. Though no definitive Republican challenger has yet emerged, that influx of cash should easily put Obama's team on course to beat the $750m they brought in during 2008's history-making election.

"The Obama campaign has shown a remarkable ability to raise an enormous amount of money," said Professor Arthur Sanders, a political scientist at Drake University in Iowa. Obama himself has been at the front of the effort, with frequent trips across the country to attend fundraising events. Last week, he went to New York where he indulged in two dinners on the same night at the same Manhattan restaurant. One cost $5,000 a head for a place and the other $15,000. But Obama's efforts, and eating, did not stop there. A third dinner followed – at the home of movie director Spike Lee – at which people coughed up $35,800 a plate. Then a final date saw the president pitch up at a Harlem concert for a last round of moneyraising.

The Democrats' fundraising approach has been multi-pronged, including jaunts such as those last week in New York. Often such trips target key battle-ground states, generating useful free publicity in areas of the country where Obama's strategists believe the election will be most fiercely fought. But the Democrats will also try to emulate their 2008 success by mobilising an army of small donors, often using social media networks to raise money quickly. In 2011, more than 1.3 million Americans gave money to the Obama campaign, with 98% giving $250 or less. More wealthy donors – those willing to donate the $5,000 legal maximum – are going to be wooed by being offered access to special campaign events in return for their generosity. It is widely believed, by both Democrat and Republican observers, that Obama's team could eventually top $1bn in election spending.

Such vast amounts of cash will give the Democrats a powerful, and necessary, weapon to fight what is expected to be a closely contested election, given the still uncertain health of the American economy. After all, propelled by an activist base energised by the Tea Party, the Republicans are expected to raise similar amounts of money.

The Democrats' cash is already being put to use. Last week, Obama's campaign launched its first TV ad of the election, giving an early kick-off to the contest as Republicans still battle fiercely over who will be their nominee. The ad, which focused on energy policy, is on air in key states like Ohio, Wisconsin, Michigan, Virginia and South Carolina, all of which Obama won in 2008 and may have to hold to emerge victorious again.

In other states, the campaign is already spending the cash to set up ground operations and lay the basis for an effective "get out the vote" operation on election day. In Iowa, even though Obama faced no rival in the state's caucus in early January, his team used its resources to open several field offices and signed up thousands of volunteers.

But it is not just campaign cash that is flooding in at ever greater levels to US politics. A court ruling that recently loosened America's campaign finance laws has seen the emergence of organisations called SuperPACS, which are legally forbidden from co-ordinating with a candidate but can spend unlimited sums of money in their cause. Individual donors can give millions of dollars to such groups, which can then be used to run highly effective attack ads against opponents. In the Republican primary, each candidate has had a SuperPAC on their side, often proving brutally effective in taking down rivals. In the 2012 presidential election, Republican and Democrat supporters are likely to make widespread use of multiple SuperPACS.

One Republican SuperPAC, called American Crossroads and linked to well-known strategist Karl Rove, is expected to raise at least $200m in the 2012 election. "The SuperPACs will ratchet up the spending even higher. It will also increase the pressure on candidates to have as much money as they can at their own disposal to combat the other side's SuperPACs," said Sanders.

That has led many critics to voice concerns about the sheer levels of campaign spending likely to be seen in 2012. Proponents of campaign finance restrictions have long argued that big money – whether from wealthy individuals, labour organisations or corporations – has a baleful influence on the political system. But instead of seeing restrictions tightened, they have been weakened. "It is potentially corrosive. People feel they don't matter if they don't have a lot of money," Sanders said.