I think grammatically the phrase "God bless America" is wrong; it should be "God blesses America", don't you think so?
3 Answers
God blesses America.
This is the Indicative Mood. It is just a statement that God (regularly) blesses America. The third person singular takes the inflection -(e)s.
God bless America!
This is the Subjunctive Mood. Here you are not stating anything. Instead, you're expressing a wish. The third person of the subjunctive coincides with the infinitive. Other examples of the subjunctive
God save the Queen!
Be that as it may, ...
It is important that he be here on time.
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@LittleBigBot: I never said this was commanding. Unlike outis nihili, I said this is subjunctive, not imperative. – Armen Ծիրունյան Jun 06 '13 at 16:24
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@LittleBigBot: The first time someone said to me that the Earth was several thousand years old, I thought they were joking too. Later I simply stopped assuming a joke in any sentence that has even the slightest religious subtext :) – Armen Ծիրունյան Jun 06 '13 at 16:36
By saying "God Bless America" you are indicating a desire that God will bless America in the future. You could even term this a prayer.
"God blesses America" would be an indication that you think the blessing has already occured - or that the blessing is currently occuring.
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It's hortatory (i.e., imperative; however, the use of the word "imperative" for the hortatory in this case might have undesirable connotations).
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Xis just short for May God blessX, which means exactly the same thing and is also a fixed formula. The initial magical May is predictable, and therefore deleted. Magical may is explained on the 5th page of this lecture. – John Lawler Jun 06 '13 at 15:18