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The Fatal Flaw of Democracy is Here and Now...and What to Do

By Paul Mladjenovic      Printer Friendly Version Bookmark and Share
Apr 15 2010 10:51AM

Few things summarize America’s economic plight today as much as this centuries-old quote:

“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing…."

No one is exactly sure who actually said it and if it is an accurate quote. That is irrelevant. The important point is that the quote resoundingly points to the fatal (economic) flaw of democracy. This fatal flaw should be evident to all as they watch today’s “big picture?.

Our current deficit (and future deficits) now exceed $1 trillion. The government’s growth as a voracious consumer of America’s resources is alarming. Additionally, most state governments are spending beyond the citizenry’s ability to pay for it. Yet, it is also much of the citizenry that voted for this dangerous profligacy!

The fatal flaw of democracy is here and now.

Our country is at the point that it can not sustain the government’s out-of-control growth. It is indeed a massive tragedy that is now unfolding and millions that have grown dependent on government largesse are now being set up for tremendous economic pain. How may they react?


I have often written and lectured about how government causes much more economic pain than it has ever relieved. The juggernaut can not be stopped from wreaking its havoc on our society and even the best election results in November’10 will at best slow it down. We have to treat the coming meltdown as a hurricane:

We can not stop it. We can only prepare ourselves and the people we care about.

Here is what to do…

  1. Become as self-sufficient as possible.
  2. Reduce your exposure to the general stock market.
  3. Accumulate physical gold & silver.
  4. If possible, move safely away from major cities.
  5. Lower your living costs as much as possible.
  6. Increase your savings.
  7. Start a pantry and have extra necessities on hand (just in case!)
  8. Learn about (and apply) ways to secure yourself, your family and your property
  9. Develop strategic relationships with others. Gain more friends and allies
  10. Add more sources of income (such as your own home business).

The list is actually longer but this is a start. Look…I am not a “doom and gloom? guy. I enjoy life and I am grateful for what is in my life…a wonderful family, good friends and a business that I enjoy. But I also have to view the world, the economy and the unfolding events REALISTICALLY.

Look…I can write some of this from my personal experience and background. My former country (socialist Yugoslavia) collapsed into social chaos in 1994 after extreme economic disintegration. Places like Greece certainly seem headed that way. Our economic house is not immune to Washington’s trillion-dollar wrecking ball.

Think about it…If millions of people are dependent on trillions with debt that can’t possibly be paid, what will logically follow? What does history tell us?

These are extraordinary times that require extraordinary planning. Therefore, the prudent thing to do is…

Hope for the best and prepare for the worst

More on this as I continue to prepare educational & informational programs to help my students and readers do some prudent planning (financially and otherwise). A good place to start is at where I have many information-packed audio seminars on business & financial matters.

In a few days I will email some information to my Prosperity Alert subscribers on how to save on your taxes for 2010 (it is too late to make changes for your 2009 taxes but there is plenty you can do with 2010!). Stay tuned for that as well.

In the meanwhile, do the right thing by the people you love. When you get a chance, I would most appreciate your thoughts on what type of educational programs that you would like to see me do for you. You can email your suggestions at Thank you and be well!

Paul Mladjenovic
April 15, 2010



Paul Mladjenovic, CFP is the author of Stock Investing for Dummies and Precious Metals Investing for Dummies. Paul’s latest educational program is How to Cash in on the Commodities Super Boom Seminar. His national financial seminars are at and his blog is