What's the difference between lies and hyperbole? Lying is wrong, but hyperbole is the worst thing ever.
One pernicious hyperbole is that fiction is a lie. The truth is that fiction is untruth, and if that confuses you, welcome to my job. My grandfather believed fiction was a pack of lies, and even tried to talk me out writing the one time he drove me back home from Liberal Arts college. Over burned toast and runny eggs, he argued that someday society would recognize that novels and movies were feeding us falsehood and that we should only deal with facts and non-fiction.
That's what I hear when people joke about writers as high-paid liars. If anything, the lie is that most of us are paid very much. Lies and fiction are two kinds of untruth that are little alike.
Lies are non-consensual. You speak misinformation under the assumption the other person doesn't know better. Your kid doesn't know there isn't a Santa Claus, but you want to fool him, for fun, or to get his mind off a chronic illness. The IRS doesn't know how much money you've hidden under the table, and you want to deceive its agents to get away with paying less. A lie is your decision without the informed agency of the other person.
This is why lies are associated with benefitting off of someone else's vulnerability, where writing novels about profound vulnerabilities like The Color Purple or To Kill a Mockingbird is praised.
Fiction doesn't work like that. Fiction is the expression of an author to an audience that knows that they're reading isn't true. When you read a novel, you're entering a consensual pact to experience something other than reality. Some readers want to be transported. Often I want to analyze the structure of someone's artifice, no different than an architect visiting a great building.
There are great uses for fiction. Aldous Huxley's Brave New World imagines a future that mixed truth and satirical implausibility to question how we engage with media and pop culture. The Twilight novels afforded millions of girls escape from their everyday problems while also being relative enough of their lives to find connection (one reason I don't abide bashing them anymore).
When I was bedridden in my own teens, the novels of Stephen King and Michael Crichton often interested me enough to give me something to look forward to - the turn of a page gave me enough willpower to survive another agonizing minute of being alive.
These are all lovely uses of fiction. Getting at truth in ways we can't articulate through composition of pure facts, or getting at our hearts when they need protection. The consensual nature is what allows revisiting; good fucking luck believing the same revealed lie as many times as I've re-read The Hobbit. It not only leaves audiences feeling safe to open themselves up, but encourages them to fanfiction and interpretation.
You might argue that lying has its uses. Enough politicians have believed a fully informed public would vote and act against their own interests; Presidents Bush and Obama alike have lied and obfuscated about their military campaigns. Both were convinced enough that it was beneficial that they continued doing it.
We even have our "little white lies," ones told for the benefit of the other. Grandpa died peacefully, you say, so your sister can sleep easier. But even the best-intentioned of these wouldn't work if the other person knew they were lies.
Whereas even fiction that you personally despise can work on vast audiences that know the words are untrue. The lies we hate, about covert torture campaigns and Holocaust denial, don't belong anywhere near the fiction we hate.