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Most recently he told me that his grandmother died. HE'S 4 1/2!! Why would you lie about that? It's so weird.
So I punish him every time I catch him lying. I have a zero tolerance policy. However, what I'd really like to do is point at him and start screaming "LIAR LIAR PANTS ON FIRE, HANGING FROM A TELEPHONE WIRE!!!" And then if possible actually take his pants off and burn them on a telephone wire.