They are, asWarren Mosler enumerates them in his book:
Deadly Innocent Fraud #1:
The federal government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow
Deadly Innocent Fraud #2:
With government deficits, we are leaving our debt burden to our children..
Deadly Innocent Fraud #3:
Federal Government budget deficits take away savings
Deadly Innocent Fraud #4:
Social Security is broken.
Deadly Innocent Fraud #5:
The trade deficit is an unsustainable imbalance that takes away jobs and output.
Deadly Innocent Fraud #6:
We need savings to provide the funds for investment.
Deadly Innocent Fraud #7:
It’s a bad thing that higher deficits today mean higher taxes tomorrow.
Mosler claims to have got the phrase "innocent fraud" from John Kenneth Galbraith, for whom I have much respect, but "innocent fraud" is an oxymoron, which the genteel Galbraith perhaps hit upon because he couldn't envision a government that intends to deceive. Or, perhaps, he couldn't comprehend why it would.
That a government of, by and for the people would engage in conscious deception and deprive the people of the wherewithal to make a living, not to mention their inherent rights, does seem incomprehensible. Besides, these false assumptions Mosler calls frauds are spouted by all the best economic minds of our time. That they perpetuate a punitive world view in which people have to earn the wherewithal to survive by subjugating themselves to the whims of the population to whom ownership of all productive assets has been assigned is not worth considering, since that's how it's been from the start of the American experiment.
I used to think that false assumptions account for the fact that the predictive value of economics is virtually nil. Now I'm inclined to agree there are least seven deadly frauds, but they're not innocent. "Deceptions" is a better term. But that raises the question of why we are to be deceived. And the answer, I think, lies in the belief, which Mosler tacitly accepts, that government has a right and obligation to manage the economy and does so by manipulating the currency.
This belief is, of course, consistent with Mosler's own experience as a securities trader, one of the middlemen who extract dollars from the real economy of goods and services to play with and get rich on fees. Mosler seems aware that investors get richer by doing nothing but lending dollars to the Treasury and getting paid back more. He's not willing to go so far as to admit that the dollars are worthless and charging for their use is like renting out the alphabet. Mosler probably approves of the Federal Reserve's near 0% interest on dollars it provides to banks (a policy announced after he wrote the book), but doesn't appreciate that's what it should be all the time. Nor does he seem to appreciate that his friends in the financial community have not yet reconciled themselves to the reality that making dollars scarcer doesn't make them worth more, as used to be the case when dollars could be exchanged for gold.
Mosler seems not to recognize that the financial class, subsumed under the moniker Wall Street, which the occupiers are targeting for reform, has been behaving as a sort of backstop for a Congress bent on demonstrating to the electorate that austerity is on the agenda whenever the populace is insufficiently compliant in providing unearned income to the investor class. It seems far-fetched, unless one considers that without the leverage of privileged legislation and currency manipulation, the powers of Congress are reduced to virtual nothingness. Yes, Congress can attend to public purposes, but where's the honor and glory in that? Providing for the general welfare is a pedestrian mission; not nearly as personally rewarding as giving away the store, whether as real assets (natural resources) or virtual wealth.
So, the answer to the implied question why our public officials persist in perpetrating deception on a grand scale would seem to be that it promotes their lust for power. Causing a gross recession in our economy--something that's easy accomplish by merely contracting the supply of money (either by reducing the volume or the velocity)--makes some people feel important. And, their victims are grateful when the boot is lifted from their throat.
The "seven deadly sins" are deadly because they are self-defeating. So are the seven deadly deceits. Our collapsed economy is evidence. Why do people engage in self-defeating behavior? Presumably, because it makes them feel good and they don't know any better. But, that's not innocence; that's ignorance.