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653 million are kept under strict control by the oppressive government: So its a dictation?

omnipresent, corrupt, moralistic government: Power corrupts, absolute power corrupts absolutely

Citizens pay a flat income tax of 67%: How on earth is the economy good?

Crime -- especially youth-related -- is totally unknown: Corruption is a crime

Citizens are forced to donate blood once every three months: Feel free to take my blood, but you may just all die (Ya know, traces of mad cow and such)

In short ......wat?

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5 million, freedom to spend their money, average income tax rate is 26%---This could work if all their produce come from their land.

and take part in free and open elections----yet you have a communist flag.

Most communist countries have been (or are ruled by) Dictators.

In short..........yea, just don't get too crazy.

Remember, the nail sticks out it must be hammered down

This has been another lesson on 'How to rule a country with Penumbra"

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