My wife and I agreed to be rigorously honest with our daughter. When "Santa" came up I was initially very uncomfortable with the lie.
After discussing it with my wife we opted to go on with the lie under the conditions that it not be used for any kind of negative reinforcement-- none of the "Santa is watching you..." kind of stuff-- and that the "reveal" needed to be handled appropriately.
When she does deduce the lie the plan is to explain to her as such:
- It's a tradition that is passed down to bring joy to children. It allows parents to give gifts in a way that carries no expectation of thanks or praise.
- She is now in on the "secret". It's her responsibility to guard the secret the same way her parents did before her. She knows what joy it brought to her and she shouldn't spoil that joy for others.
- We do not lie to her, as a rule. We took this very seriously and thought hard about it. We decided the joy it would bring to her, and to the people she might one day be "Santa" for, was worth betraying her trust in this case.
I still don't feel great about it, but I can live w/ myself.
The little girl is 7 right now. She has said stuff like "I think Santa is really you and Mom". She also questions that conclusion, though, because because she says, effectively, that she doesn't have evidence for it. (I need talk about about Occam's razor and the idea that extraordinary claims require extraordinary evidence... >smile<)