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Your illustration is why we are NOT a democracy, but a representative republic ruled by laws that protect the minority.
But to answer the first question, I would quote Churchill who said that democracy was a terrible form of government...but that it was better than all the alternatives.
Ultimately, your question becomes one of whether or not people are capable of governing themselves and I believe that in the end, they are.
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"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." – C. S. Lewis
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