We are in the middle of an epidemic in my parts. Since time began there have always been a few of those parents with that 'my children can do no wrong' mentality, but over the last 15 years it has infected an increasing number of people around here. Personally I would rather see the avian flu.
My next statement is just a personal opinion that is based on having been a child and knowing several children. So if it is totally wrong based on your own children then you, of course, are the exception. Any parent who believes their children would never lie to them is a fool. There are ranges of lies. From the 'honestly I didn't steal your car and transport drugs' to 'yeah, I put the laundry in the dryer already' then running to do it as soon as the phone is hung up. Personally, I still use that second one today. Somewhere in this range are most people. Oddly, the children of these infected parents are usually at the far end of the lying scale, the scary end.
On a day to day basis it doesn't bother anyone else. Let them live in their delusional world if it makes them happy. Oh, but when something goes wrong it can't be their kid's fault so they start looking for someone to blame.
The problem with that is that they always seem to key in on kids who don't have the family structure to support them. To shut them up society is happy to let the children of immigrants or disfunctional families take the blame. Very sad, and wrong.