What would the world look like if no one lied? If your mother told you, I was planning on leaving your father but then I saw the little pink cross and knew I was trapped forever--but I love you anyway. If your lover told you, I want to have sex with that woman over there, and that woman, and that woman, let's face it, I'm hardwired to be very visually driven and you have let yourself go--but I love you and my will to not harm you is stronger than my sexual drives. If you told a lover, I am hard-wired to seek a mate who will provide for myself and my offspring, you're not the best lover and you're a little on the "small" side, but my innate drive to be provided for will compensate for your lack of prowess--I do love you despite your inadequacies.
Lies keep our society together. So yes, we lie all the time, mostly to ourselves because one of the hardest things to do is to look in the mirror--really "see" the person on the otherside and their life and not recoil in absolute horror.
The distinction is between truth and reality--which is the subset of the other? I do not know. I believe ultimately there are only 2 realities: Fear and Love--the real LOVE that overrides all the negative "realities" we build around ourselves.