We think lying is only bad when we do it for a wrong reason.
If we lie to cover up a mistake, it's wrong. If we lie out of flattery, it's OK. However, in the next Psalm that I read, it says "Everyone utters lies to his neighbor; with flattering lips and a double heart they speak. May the Lord cut off all flattering lips, the tongue that makes great boasts..."
So much of what we say and do and whether it is right or wrong comes down to our hearts. Are we using flattery to get ahead, like lying to my boss about how great he is and what a great job he's doing even if I don't believe what I'm saying? Just because that lie makes someone else feel better doesn't make it right.
However, is it wrong to flatter someone if we're not benefiting from it? Is it OK if we just want to make someone feel good so we tell them they look nice even if they don't?
Sometimes it's hard to decipher where the line is. Maybe it's best to just not even come close to it and to be honest always, or to just keep our mouths shut if we can't be honest.
The Psalm concludes with "You, O Lord, will keep them; you will guard us from this generation forever. On every side the wicked prowl, as vileness is exalted among the children of man."
I pray that as vileness is exalted in this day and age that we will be guarded.