23% of US 8th graders think Australia is a dictatorship - WTF?

Dead set. WTF is going on over there? (click to enlarge)

This is the result of a National Assessment of Education Progress report done recently to US 8th graders.  

Here is the question concerned, of which I have snipped above. 

That's not all. 10% think Australia is under military rule, and 12% think the gov discourages public affairs participation. That's nearly half of all US 8th graders who haven't got the faintest idea about a country that is one of their closest allies. 

Is this that stupid US exceptionalism again? That the US is the only really free country in the world or some bullshit like that? *sheesh*

What's next? Will the creationists be teaching that there's dinosaurs roaming the outback? :s