The fact that government borrowing has risen so far this year reminds us of a key truth about the public finances - that they are less amenable to government control than generally thought. This is because government borrowing is the counterpart of private sector lending. Borrowing will fall when and only when private sector investment rises and savings fall. And this is not happening yet.

This poses a question. Given this, Why do so many people pretend that governments can easily control borrowing? I suspect it is because of a number of cognitive biases:

1.The fundamental attribution error. We tend to attribute outcomes to agency more than to situational factors. This causes us to over-estimate the extent to which the Chancellor determines borrowing and to under-estimate the extent to which that borrowing depends upon millions of private decisions to save or invest.

2. The representative heuristic. We tend to think that outcomes must somehow resemble causes, so we think that government spending and tax decisions must determine borrowing when in fact they (largely) determine the level of GDP instead. This heuristic leads us to underplay the extent to which policies other fiscal policy affect borrowing. A solution to the euro crisis, and/or effective policies to get banks lending again, would be more effective deficit reduction policies than fiscal restraint.

3. The illusion of control.People over-estimate the extent to which they are in charge of events. This might be even more true of politicians than other people because of...

4. The optimism bias. People tend to enter politics if they think they "can make a difference". This means politicians are selected for the optimism bias, the belief that they can affect events for the better.And this predisposes them to believe they can control government borrowing.

We shouldn't just blame politicians, though. These biases exist in the media as well. The Chancellor who told the truth - that he can't easily control public borrowing because private sector net lending depends upon things out if his control such as the euro crisis, banking system and dearth of investment opportunities - would be committing career suicide.

There's more. It's hard to fight against these biases in part because of the social proof effect; when so many people seem to believe something, it is tempting to go along with them.

And even if you conquer the social proof effect, there's another problem - the Overton window. When the dominant discourse is that governments control borrowing, the person who denies this becomes a crank, an extremist, and is ignored, at least by non-economists. Those who understand the public finances thus make excessive compromises to mainstream opinion, for example, by telling stories in which fiscal policy does affect government borrowing by affecting the private sector's financial balance.

Such stories will often be true - though they don't seem to have been so in the last 12 months. But they don't change the fact that the government's financial balance is merely the counterpart of the private sector's.

It was Bismarck who said that politics is the art of the possible. He should have said that it is the art of the application of cognitive biases.