Tension Between Players and Mods

We can't deny that there is tension and in some cases hate, frustration, and other emotions of the sort toward our mods.

I believe the sole cause of this is: Mods do a half ass job and only take action for 1/1000000 issues happen when they are online.
"If the mods aren't moderating, well what's the problem?"
The problem is that when the mods actually do issue punishments, the person receiving the punishments feels that the warnings issued are based upon personal reasons. This is understandable considering the fact that there are countless other members doing the same thing that caused this person to get a warning, yet they are able to get away with it without a punishment. The person who received the warning then spreads rumors about how he was treated unfairly and how mods abuse their powers.

So we are left with two options.

1.) Mods step up and stop being lazy.
I am not a fan of this option, especially since mods get easily butthurt when we spew racist comments. There's a type of rhythm we have when we speak to each other here on atwar. We call each other gay, faggots, dumbfucks and the lot. But the majority of the time that I use these phrases, I'm often being sarcastic and more importantly, the person I'm talking to understands that too. We all make jokes about british people, kebabs, arabs, jews, Americans, gays, jews, hitler, jews. The point is, we all are able to laugh and point out each others differences as well as laugh at our own. I don't think there is anybody here that really believes we should burn jews and homos. think deep down, everybody here as a mutual respect for everybody and all our 'racist remarks' are for shits and giggles. I make fun of british people all the time, yet I'm still friends with the leaders and officers in my clan that are British. I actually don't mind the british, I just think british jokes are hilarious. This is why I favor option two.

2.) Get rid of mods all together.
When was the last time somebody was being excessively bullied on atwar? When was the last time a mod took action in a case like that? I can't remember, can you? Mods don't really serve a point, except for getting people to stop spamming in the help and global chat. Even then, people still spam. I think we can manage ourselves as a community. We don't need mods.

Thoughts?