>If you remember history, every single extant liberal democracy has had surveillance capabilities for decades, and continue to be healthy free societies.

the difference here is the actual massive surveillance (basically total possible by the technological means of the time) performed by the KGB/Stasi outside of the due process inside the jurisdiction of their respective countries. It is exactly the emerging characteristic of fusion centers and NSA activities. Please name an "extant liberal democracy" which has had such massive surveillance capabilities and applied them in such a way.