The question of whether they are fooled over time is much more relevant.  
 
Sure, people don't notice the immediate loss from inflation, but eventually they start catching on when they notice they have less "stuff" than before and both parents have to slave away to make the family income.  
 
At the heart of all this is the conceit that economic planners are invariably more intelligent than their subjects. I personally believe this stems from ancient anti semetic biases against businessmen and bankers, from the sense that they get their money by cheating instead of earning it with intelligence. These people being stupid in reality, it would be easy to trick them with the Keneysian Noble Lie.