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In the Harry Potter series, the only Muggles we see anything more than a glimpse of are the Dursleys, who of course are a bunch of idiots. But there must be plenty of Muggles who are aware of the wizarding world: Hermione's parents, whom we only see very fleetingly in "Chamber Of Secrets", plus all the Muggle parents of all those students at Hogwarts who aren't pure-bloods. Why do we never hear what they think?

Also, the (unnamed) Muggle PM at the beginning of Half-Blood Prince acts in a very silly way (referring to "Serious Black") and then thinking, "I mustn't tell anyone about the Minister for Magic or everyone will think I'm nuts." Why doesn't he think, "There is a power here that can control us and which we're powerless against - I must contact former PMs to see if there's anything I can do to defend ourselves against a possible wizard menace"?

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    Reasons for this anomaly are examined at length in Professor Mordicus Egg's The Philosophy of the Mundane: Why the Muggles Prefer Not to Know. - (Pottermore - Technology) – ibid Mar 17 '16 at 16:42
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    Given that the Minster for Magic tells the incoming PM that nobody would believe him, it is also reasonable to assume that the exiting PM gets a memory charm cast on them that causes them to forget their knowledge. – NKCampbell Mar 17 '16 at 16:44
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    The PM is in HBP, not OOTP. – DavidS Mar 17 '16 at 16:47
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    It's just not a focus of the story. The story was about magic not about muggles. That's like asking how come in Star Wars we don't see more about the owner of the cantina? I bet they're an interesting person. – Probst Mar 17 '16 at 16:49
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    @Probst Tales from the Mos Eisley Cantina – Rogue Jedi Mar 17 '16 at 16:54
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Rationalization

A lot of people believe that everything can and must be rationally explained, or at least that there is a very limited set of "weird" things on Earth without a rational explanation(e.g. miracles according to several different religions).

The fact that there are 300,000/up to a million people (see During the events of the Harry Potter series what is the total population of Wizards/Witches globally?) throughout the world performing "weird" things on a daily basis, without any rational explanation whatsoever, can definitely raise some eyebrows.

Moreover, there are relatively few occasions for Muggles to witness blatantly magical events and, in most cases, Obliviators step in and erase/modify the memories of the witnesses.
The average Muggle who tends to rationalize is led to think that magic doesn't exist because he/she has never witnessed an act of magic, and because history and science books (which are the basis of a Muggle education to understand how the world and the society work) haven't talked about magic.

Only Muggle parents of Hogwarts students can connect the news on their newspapers to their knowledge of the Wizarding world (I recall Hermione saying something like, "Even my parents are worried, and they are Muggles!").

Now, let us consider the Muggle PM before and after knowing the truth about magic.

Muggle PM, before knowing the truth

Like most Muggles, the PM is apparently a rationalist. He considers himself an educated man, and throughout his life he has seen the world with a seemingly consistent view, so that is able to explain most events witnessed by Muggles. Because of the International Statute of Secrecy, blatant acts of magic don't (usually) occur and, because of Occam's razor, the PM (like most Muggles) is led to think that there must be a rational, yet unknown, explanation to the occasional "weird" things he may witness.

Muggle PM, after knowing the truth

Former Prime Ministers usually remain influential political figures and the current PM wouldn't risk being made fun of by other Muggles (including well-known politicians he may need to keep in touch with). As an example, people could say

Look at him, he believes everything he's being told! Heck, he even believes that magic is real! (laughter ensues).

Therefore, the PM accepts the existence of the MoM, etc. without telling anyone in order to maintain political credibility. In addition to that, you must remember what Fudge said to the Prime Minister(HBP):

It's live and let live.

The PM may think that it's better not to do things - like discussing about magic with other people - that may anger the MoM, and he may be right.

After all, when someone can get in your office, make people forget about scheduled calls, and transfigurate your teacup to a gerbil, you'd better do what he/she tells you to do.

In fact, I suspect enchantments exist that prohibit the Muggle PM from telling anyone about magic, and that (as NKCampbell suggests) Obliviators modify the memories of former PM's.

For all these reasons, at least as long as the Wizarding world doesn't interfere with Muggles, it is a wise move for the PM to not tell anyone about magic.

Additional considerations

Another thing you need to consider is what would happen should the Muggle Prime Minister tell to the general public that wizards exist and that they do (or may) prove to be a threat for everyone.

First, the PM cannot provide any proof.

Yes, he talked with the MoM, but so what? Is there any recording of proof of the meeting? Probably not, because of fear and/or special enchantments.

Is there any proof that the PM did not talk to an insane person? No. Such an unexpected announcement would need at least some kind of proof, otherwise it may not be taken seriously.

What if Muggles did believe the PM? Since this information is completely unexpected and since most wizards live in Muggle areas, it would be similar to a sudden announcement of the outburst of a civil war, with additional confusion caused by not knowing the full extent of magic and its limitations.

I'm not a lawyer (or a politician or someone holding security clearances), but it seems to me that the reactions to this announcement would amount to a "serious(or even exceptional) damage to national security" (see https://www.law.cornell.edu/cfr/text/18/3a.11) and, as a result, this information should be at least classified as Secret or Top Secret. Since only the PM is told about it, this information may fall into the category of "things the PM/Head of State knows because of his office but must not discuss with anyone".

TL;DR. Most Muggles tend to rationalize and dismiss weird things they may witness.

The International Statute of Secrecy usually does a good job of hiding the existence of the wizarding world, so Muggles don't often encounter blatant acts of magic.

The PM doesn't tell anyone about magic because:

  1. he doesn't want to lose credibility
  2. he might be actually forbidden to tell anyone(because of special enchantments) and/or fears the reactions of the MoM
  3. this information would probably be considered as Top Secret classified, in the sense that its sudden announcement could possibly lead to chaos.
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    I'm now imagining a top secret project in the NSA where they are trying to find ways to eavesdrop on magical communications. – IllusiveBrian Mar 17 '16 at 19:41
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    Since the CIA once tried to train psychic spies(fas.org/irp/program/collect/stargate.htm), it is not a very far-fetched hypothesis. – A. Darwin Mar 18 '16 at 6:51
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    Certainly this makes sense, but it throws up another question: why do even the good wizards seem to think they have the right to alter Muggles' minds whenever it suits them? Even Hermione does this to her parents at the beginning of Deathly Hallows. Doesn't anyone think, "If this happened to me I'd feel violated" (like Tara when Willow blanks her memory in Buffy The Vampire Slayer)? Does this mean that even the good wizards regard Muggles as inferior - maybe less human? – Wallnut Mar 23 '16 at 10:57
  • @Wallnut Good question. We need to distinguish between two cases: 1)wizards altering the minds of Muggles who witness magical events, and 2) wizards altering the minds of Muggles for other reasons(Hermione). The reason why 1) occurs is the International Statue of Secrecy: wizards want to hide themselves from Muggles, and any Muggle witness could threaten the clandestinity of the wizarding world, so to say. Therefore, memory charms on Muggles are necessary to protect wizards, not because Muggles are less human. As for 2), Hermione also casted a memory charm on the Death Eaters in that cafè. – A. Darwin Mar 23 '16 at 11:08
  • @Wallnut (in Tottenham Court Road), so it is not something wizards only cast on Muggles. Hermione altered the memories of her parents so that they couldn't have been found by the Death Eaters. Her parents were Muggles (hated by DE, and couldn't defend themselves from wizards), and Ron's parents encountered a lot of dangers, as well. The easiest way to protect her parents was to hide them in a remote location, and the memory charm was the easiest way to make them hide without worrying them("Look,someone wants to kill us but I'm gonna stay here"), given that the Imperius curse is forbidden, – A. Darwin Mar 23 '16 at 11:17
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There are intelligent Muggles, but wizards don't realize the importance that Muggle science has to their world. This makes them believe that Muggle science is not important since they don't know enough science to connect it to magic.

Flight is a case in point. Wizards, except for Voldemort, Quirrel, and Snape, must use enchanted objects such as brooms, flying motorcycles, and flying cars to make wizards fly. If they knew science, they would realize that even though air is a gas, it is also an object that has mass, weight, and pressure (enough to make airplanes fly). If wizards knew the laws of physics and the properties of air, as do Muggles, they should be able to figure out how to enchant the air around them to produce the right amount of pressure in the right direction to lift them up and propel them. Once this is mastered, it could even be taught at Hogwarts, along with high school math and physics..

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