Is honesty always the best policy?

One of the things that hurts me most as a parent is when my daughter lies to me. Since she was a toddler, I have told her that honesty is the best policy -- and that it was better to tell me something, the truth, even if it meant I might get mad a her, than for me to find out she had lied to me. That would make me even angrier, I told her.

But over the years I have wondered, is honesty really the best policy? Or always the best policy?

Don't get me wrong. I think it's important to tell the truth. Most of the time. But what if you knew the truth would hurt someone? Should you lie or not say anything, even when the person is practically begging you for the truth?

I remember years ago, during a particularly dark period in my life when I was in therapy, I was consumed with guilt over something I knew about someone and wanted to reveal what I knew, because I hated lying. And my therapist -- a licensed psychologist -- told me not to. Why hurt someone, she said, if you didn't have to?

I was shocked. I still am, a bit, years later. But I never told -- and was glad I didn't.

Recently, I was confronted with another situation that made me question the whole "honesty is the best policy" policy.

What if you know something about someone else's child that the parent doesn't know? I'm not talking about the kid doing drugs or committing a crime. But what if you knew a friend's kid was on Facebook, even though he didn't have permission to be on Facebook? Or your friend didn't know her daughter was fooling around with a boy behind her back? Or driving her friends around when she wasn't supposed to (which, technically, is illegal)? Would you tell your friend or keep your mouth shut?

What if you saw your best friend's husband (or wife) with another woman (or man)? Would you tell your friend, even if she or he asked if you thought her or his spouse was having an affair?

I know there are no easy answers to these questions, but I'd be interested to hear what you all think. Is honesty always the best policy? And if not, what do you tell your kids? First do no harm?