system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: what is one psychological benefit to keeping traditions such as Santa, the Tooth Fairy and others alive and what does it do to a developing kids mind?
gpt
The idea that Santa keeps track of the good and bad things you do reinforces the principle that your actions have moral significance and long-term consequences whether or not you are "caught" or rewarded immediately. This is a very abstract concept that would be impossible to explain to a 3 or 4 year old child, but early childhood is when our understanding of our place in the world is formed. So the Santa story makes this concept concrete for them. 

It is also an extremely important principle for a healthy functioning society. If you look at the news, you see what people do when they think they can get away with stuff indefinitely. We need more people who have internalized the moral significance of their actions.

It also gives them a worldview where they are noticed, and their actions matter to someone --personal and relational agency. Children who believe that nobody notices or cares what they do feel invisible and insignificant, and they act out in an attempt to be recognized. Of course, parents and teachers can and should give them that recognition all the time, but extra reinforcement is a good thing.

The tooth fairy story reinforces that growing up and the resulting changes in their body (that can be gross, uncomfortable or scary) are normal, good, and something to look forward to.