Is lying to myself REALLY such a terrible thing to do?

Well, me and my friend were kinda just talking about life, and I mean, I have a depressing life, so does he

he asked me "How do you stay so happy?"

and I of course replied "I pretend like it's all right"

and then he went off on a lecture about how I can't lie to myself forever and all that cause he does that sometimes

But is that really such a bad thing? It keeps me happy and all, so how could it be so terrible?
Is lying to myself REALLY such a terrible thing to do?
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