Dennis Prager argues parents should keep the Santa story alive as a beautiful part of childhood, then answer honestly when kids directly ask if he's real. The point: traditions with mythical elements can enrich childhood without being dishonest, since you're telling the truth when asked.
Now look, if your kid reaches a certain age and says, "Okay, Mom, level with me, is Santa Claus real?" Okay, fine. You could say, "It's a beautiful idea. It makes for a richer experience when you're a kid. And if you mean by real, is there someone who comes in a sled from the North Pole down everybody's chimney? No." Okay, that's fine. But until then, why not have it? It's a beautiful, rich part of life. Every tradition in the world has this sort of thing.
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