OK, I'll try to follow along with you:
l would like to repeat that with a fundy gov+default rules, then you could build huge numbers of fanatics and armors, without even straining your resources, and then go on this campaign to take over the world, and because of the jillions of fanatics
No disagreement here. That's what Fundy does best.... build jillions of units, and go on cutthroat military campaigns to conquer the world. Check.
(not to mention the substantial amount of cash to build city walls
You lost me on that one. If your military juggernaught is sweeping the world, my personal technique is to skip walls. I rarely build them under any circumstances... maybe one or two places where I arrogantly overstep the ability of my trailing units to catch up, or if I take a city in the middle of the AI empire... but I normally don't even build the Great Wall. But that's OK... just a minor (expensive) difference.
Next:
you could very easily use armor to take over a city,
Gotta stop here. In modern combat (e.g., the AI has Alpines/MechInf/Walls), my armor gets butchered in city assaults. I use armor in the open, on partisans, etc. You must loose a lot of armor!!! Howies, Air, and Spies are my primary attack units

. Just my preference though.
now the fundies can still build hordes of fanatics, and not put a dint in their wallet, it's just that now their main military units may now cost money.
True enough...
the soviets did spend themselves to death, but this was on research to evade the effects of the Star Wars project of the reagan adminastration-in civ II terms, they had too much trade in science, too little in taxes, and corruption everywhere(note-i edited the communist gov to have corruption as well), and even though this doesn't activate a revolution in civ, the fire sale of all the improvements would make someone consider democracy or republic
I'm gunna have to take a guess what exactly you are getting at here... you might want to break your thoughts into simpler sentences for slow thinkers like me (with respect to "the" Slow Thinker!!).
I think you are comparing the real world of the US-USSR arms race to the end game. And you're saying that real life commies didn't really have good science output, and they had lots of corruption.
If so, I'll say they had good science output, but America's was better (e.g., Democracy=better than Commie). I agree that the commies have more corruption than Civ 2 has in Communism. What rate of corruption do you feel is best for Communism?
even though this doesn't activate a revolution in civ, the fire sale of all the improvements would make someone consider democracy or republic
I don't know what you are talking about... revolutions and fire sales will not occur even with Star Wars and slightly higher corruption in Communism.... Fire Sales occur when you don't have enough gold to pay the bills between turns.... if you don't have enough gold, make and deliver some freight, raise taxes, demand tribute, take cities, make taxmen.... there's lots of ways to get gold to prevent Fire Sales. Gotta plan ahead a couple turns is all....
I don't comprehend what the talk of revolution is about ... the context is unclear...
make someone consider democracy or republic
Bingo!!
You hit the nail on the head. Democracy will bury Communism or Fundamentalism, all things being equal in a properly run empire....
which brings us to the point you originally made.... why aren't people very interested in messing with Commie/Fundy. For players that are relatively new, Commie/Fundy works out pretty well... Sid Meier made sure of that. For real party animals (party... political party, pun intended!) the party to have is Democracy and "celebrate" for the rest of the game!!
So what you've just done is talk yourself out of Fundy/Commie and discovered that you need to run a Power Democracy!
Velkommen t' da Paar-tay:
Power Democracy!!