"Would you rather people be honest with you, even if it’s something not good, or lie to you to make you feel better?"
There have been many times I have been told the blunt, honest truth by my mom or my best friend, and at first it felt like someone punched me straight in the chest, but then I realized they were right. Accepting the truth can sometimes be harder than saying it.
For people who constantly spawn lies about everything and anything, that's a problem. Remember, if you're going to lie, you better have a damn good memory.
When it comes to serious situations, be honest. If someone is making a really bad decision that could ruin their life forever, then they need to be told, even if they choose not to listen. It also depends on the source, too. Someone you just met could tell you something in their attempt of being honest, but if they don't know you, it's kind of hard to take their advice seriously because it might not pertain to you at all. That's happened to me before. Someone only knew a snippet of a situation I was in and a friend of a friend tried to tell me to do this and that, and I'm like no, I'm doing this because you don't know what the fuck you're talking about.
If someone is sick and they look don't look too well, I think it's okay to tell them they look good or better, because a white lie like that can cheer a person up, even if they know you're just saying it to make them feel better. That's more about being kind, though. No one with a serious illness wants to hear, "WOW, you look like shit!"
If you're dating someone and you don't really like them, or aren't really attracted to them, but you're afraid to say anything - that's just being a coward. It's better to let them down sooner rather than later, because then attachments won't form and you're no longer wasting time. Just say, "You're a nice person, but I don't see this going anywhere." Or "I like you, but only as a friend." You can't force yourself to feel something you don't feel. Some people won't take it easily, but others will accept it and say okay, I appreciate your honesty, and they can move on and find the right person for them. Leading a person on does more harm than good.