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I agree. I speak to kids honestly. Lying to them imposes and/or reinforces a shift in their focal orientation from objective reality to subjective fantasy.

I play a game with my son called real or imaginary... I say a word like “platypus” or “unicorn” or “skeleton” or “ghost” and he categorizes it by saying “real” or “imaginary”. He’s smart enough now that he says “extinct” for dinosaurs because they no longer exist. We have a lot of fun and superstitions like curses and ghosts are correctly identified as imaginary. I always am careful not to denigrate imaginary things as such, reminding him that pretending things and imagination are fun... but in the end some things are real and others simply are not.

Infancy stands in great contrast to adulthood in many ways. The role of the parent is to provide for the child and oversee that tremendous transformation from an undeveloped nonrational dependent (indeed helpless) baby through to a fully mature (hopefully flourishing) rational independent adult. Santa Claus, stands with the baby bottle, the soother, the fluffy blanket, the picture books, and the ignorance of harshnesses of reality which accompany adulthood and which are generally inappropriate and/or too complex for a toddler to understand. Santa represents the bounty of virtue, the reward for being good and psychologically IS a bigger than life metaphor for the parents. As children move from dependency upon the parents, Santa will naturally fall away but the sense of reward and bounty will live on in self dependency and a sense of life that takes reality itself as benevolent... in that sense the child becomes his own parents and in a way his own Santa. Belief in a Santa being real, like the toys of youth, is perfectly fine when left behind appropriately as childhood things... but the idea and the sense of Santa is not inimical to life... but can be a valuable lesson for it.

I guess I disagree, to a point, with most here. As far as it goes, I think Santa is fine if understood as only a myth of tradition, but not if presented as a fact of reality. Children can be stunted in a very real way by introducing the idea that this is not just a myth that we Make-Believe this tradition, but a truth. During the first years of a child's life, they are desparately grasping for information to make the world understandable and consistant. This is the worst time to introduce the idea (as true) that mysticism is real and good and faeries and magical people are the way of the real world. Aside from the whole lying thing, this is more destructive. Then, as they start figuring out the lie, they may keep the idea that magic is real, but THIS time, it wasn't. And Mommy/Daddy are dishonest. Double-good going.