What about making kids believe in Santa Claus, isn't that a lie? Sure it is. In fact it's a huge one. Isn't it hypocritical to raise children to not lie, and then lie to them ourselves? Won't they model our lying because they see us doing it?
Actuality, it is not harmful to lie to your child, if it's in the spirit of entertainment.
It's fun for parents and children to indulge in this myth together. In fact, we should take advantage of this time in children's lives when they are able to experience the joy of believing in such fantasy. Rest assured, they will not feel betrayed upon eventually figuring it out, because they will understand that it was all in fun.
A lie that is purposed to provide joy, is different from a lie that is purposed to coerce. If we as parents make that distinction ourselves, then our children will model knowing that difference as well.
Another aspect of Santa Claus is the "Naughty and Nice" list.
Good kids get presents and bad kids get coal! No doubt this was a useful device to get kids to behave. "Remember, Santa is watching you all year!"
But this is bad: This type of lie is not in the spirit of entertainment, and it denies children of information that they need for optimal development.
Another potential risk is if a child gets a gift very different in value than someone else's. (Not everyone can afford to buy expensive gifts.) The child could believe that they behaved better or worse, not having at all been the case.
Ask yourself this - Did you feel betrayed by your parents when you found out they lied to you about Santa?