I think I believed in Santa Claus up until I was about 11 or 12. During my childhood, my parents did everything possible to make him "real" to me...they encouraged me to make a Christmas list every December, took me to see him at the malls (and explained away the fact that many different guys in Santa suits were everywhere with the story that they were all Santa's "helpers") read me Santa books, and had me watch all the good old Rankin - Bass Christmas specials with him in them.
But, I think that when I got to be a preteen, I started to realize that logically, Santa could not be a real human being, entity, whatever. It's certainly a wonderful story that promotes the spirit of giving and generosity, and when/if I ever have children, I'll definitely encourage the same belief in Santa and do all my parents did to help me believe.
And actually, there is the story of St. Nicholas, the man who would leave gifts in people's shoes, which I think the legend of Santa may be based off of....so in a way, Santa DID actually exist a long, long time ago.
That being said, I think that one of the ABSOLUTE WORST THINGS a parent can do is to come right out and tell their kids "There's no such thing as Santa, you need to grow up, etc" or to allow an older sibling or other adult to do the same. Just let them arrive at the conclusion that Santa is make - believe on their own, like my parents allowed me to do.
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I wish Sterling Holloway narrated my life.
"IT'S NOT FAIR!" "Life isn't fair, Calvin." "I know, but why isn't it ever unfair in MY favor?" ~ from Calvin and Hobbes