The most basic problem for democracy raided by propaganda is the possibility that the vocabulary of liberal democracy is used to mask an undemocratic reality. If so, there could be a state that appeared to be a liberal democracy. It would be a state the citizens of which believed was a liberal democracy. But the appearance of liberal democracy would be merely the outer trappings of an illiberal, undemocratic reality.
Allegiance to the group identity forged by political party affiliation renders Americans blind to the essential similarities between the agendas of the two parties, similarities that can be expected to be exactly the ones that run counter to public interest, in other words, those interests of the deep-pocketed backers of elections to which any politician must be subservient in order to raise the kind of money necessary to run for national office.
The massive state bailout of financial institutions, leading to immense public debt, was followed by a demand by those very same financial institutions that were bailed out by those states for the states to pay down their debt.
The nature of liberal democracy prevents propagandistic statements from being banned, since among the liberties it permits is the freedom of speech. But since humans have characteristic rational weaknesses and are susceptible to flattery and manipulation, allowing propaganda has a high likelihood of leading to tyranny, and hence to the end of liberal democracy.