You're right on one thing: you can't be so deluded that you are out of touch with reality (or others think you are out of touch), so there's a case to be made for an optimal level of delusion (as Baumeister did).

But having said that, I think it is important to err on the side of aiming higher rather than lower (or even at the "right" level). It seems to me that the troops gain a lot more inspiration from a gradiose vision rather than from a ultra-realistic one. Of course, a lot depends on the personality of the leader too; some leaders appear to inspire people even with only realistic (but laudable) targets...

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