Is Democracy the Perfect System?

Is democracy the perfect system?
Before we can even start discussing this issue we have to establish one fact. True equality doesn’t exist. There is always someone smarter, someone working harder, someone with a physiological advantage or someone with just a better background. Even the human life isn’t always valued as equal. But that is a topic for a whole other discussion.
Democracy basically promises healthy management of a specific country because the people can change its leaders according to whether they are happy with the current conditions or not. This system sounds right in principle but I don’t think it is thought through completely. The first and I think the greatest issue is that the politicians are operating with money they don’t own. Therefore there is a great deal of moral hazard involved. Moral hazard means that someone is able to manage a great amount of money and put it to risk but at the same time isn’t exposed to the risk so they have absolutely nothing to worry about. And it isn’t really hard to hide these errors of judgment before the people. A great example is the recent debt crisis. Countries have been borrowing huge amounts of money and the politics have been considered good because they could operate with money that wasn’t in the actual budget. Therefore they could stay in the government for a long time and they didn’t have to suffer any actual repercussion of their actions when the facts about the debt were found and they weren’t simply elected in the government. The next issue is that most of the time the majority isn’t right. Therefore non-logical choices are made and this starts the first issue all over again. Another issue is that all government officials are highly prone to corruption and the penalties for corruption are very mild. Another things is that demagoguery is also a common sight in democracy and we this issue is very hard to prove and therefore very hard to punish.  
Yet democracy is all we have since all other...