Simply put; a policy is a collection of decisions made by the policyholder. Honesty's policy is no exception; it too consists of a collection of decisions. The only difference is it has a lot more than just one policyholder. Therefore, the question should not be "Is honesty the best policy?" rather "Out of 6 million people, whose policy is the best?" Since it can't be all 6 million of them, I will answer the question "no", some honesty policies stink.
In some policies, there are several stipulations written in fine print and their penalties are brutally stringent (honest). There are no grace periods for change of heart and in place of leniency, a late charge is applied; that's their policy and they stress throughout it that they are not responsible for any damage resulting from adhering to their terms. In other words, "the truth hurts" is part of their policy and they'll reveal their honesty, citing it clause after clause.
In other polices there are no stipulations at all. They are held by holders, who are willing to make amendments; accordingly. There are no penalties, no late charges and most importantly, there is no fine print to sift through and there's no hidden clause to hurt you. There are no X's marked and there are no dotted lines to sign on; there's no risk or high-rate factor. These policyholders have written in a compassion clause that exempts you from all of that. (Compiled with best intentions, these policies are trustworthy and merit all the appreciation their holders receive.)
The thing about policies is that the policyholder can, at any time, change his or hers. There are no written rules requiring its contents remain in tact and unaltered forever more. If (for example) you find yourself getting ready to hurt someone's feelings because "bluntness" appears under Section 3 in paragraph seven, you can always take out a pen and rewrite paragraph 7. (No one has ever written his or her policies in stone.)
The only thing worse than having a bad honesty policy, is not having any honesty policy. If you are not an honesty policyholder (of some sort) then you're just a liar. Your "collection of decisions" (concocted of lies) have no stipulations, no clauses or fine print because you have no convictions; you have no policy at all. ...Ironically, though liars lie to benefit themselves (in some way or another), people who don't hold convictions, hold nothing and are left empty-handed.