Everybody lies?

When did we become a nation of liars? Whatever happened to the ethical code we were brought up to live by... that we would not lie, cheat, or steal?
I have been discussing values and ethics with the classes I teach at a community college and a technical college, and it is the consensus of the under twenty-one members of those groups that everybody lies (cheats and steals, too)! I thought that perhaps the younger students would be upset that they are not trusted, but they seem to believe that it is justified. The older students in those classes are incensed... but they are forced into the "untrusted" category of their peers, since they have only recently returned to academia to better themselves.
I think it is appalling that there must be rules and laws in place that prohibit students from doing things we were allowed to do... like complete take-home tests... because there is no trust in the fact that they won't cheat. They admit that, if given the chance, they will cheat if it means they'll get better grades.
What are we teaching young people? They readily call my attention to the fact that lying is an acceptable norm, especially with politicians, and even with their own parents. It makes me sad to think that these kids believe that all people lie and that it's okay to lie!
It is my hope that we, "baby-boomers" and beyond, stop lying to and in front of these kids... but perhaps we first need to stop lying to ourselves. Let's admit that we went wrong somewhere, and go back to our original teachings... not just because "the Bible tells us so", but also because we know what is good and what is right.
Peace.