An ATSTP List member explains the difference between lying and bullshitting as being about intent:
I think the distinction between lying and bullshitting is an attempt
to clarify the intent of the person engaged in the act.
According to my interpretation Harry Frankfurt’s essay, “On
frankfurt__harry_-_on_bullshit.pdf), lying is a conscious effort to
misrepresent reality, whereas bullshitting is a conscious effort to
misrepresent the person doing the bullshitting. So the purpose of
bullshitting is to make the bullshitter seem like a different sort of
person than they actually are, or to misrepresent their own mental
state. Lying, in contrast, has as its primary goal to deceive another
person about reality.
So, if I am bullshitting you, my goal is to make you see me
differently. If I lie to you, my goal is to make you see reality
This distinction is important in the context of interacting with loved
ones. For example, my wife has told me a false story about her past,
including her educational background, her past career, and the
untimely end of her career due to an accident. None of it is true. Is
she lying to me? No, because her primary goal is not to have me
believe something that is not real. Her primary goal is to have me
see HER differently–as somebody with an extraordinary history and a
tragic accident. By the way, her goal is not just to have ME see her
differently. She has told others this story, for the same purpose. She
may even tell HERSELF this story, in order to construct an image of
herself that is more emotionally tolerable for her (though this is
pure speculation on my part).
So you can see that distinguishing between lying and bullshitting is
not just semantics. It is critical for understanding intent, and
intent matters. Intent makes all the difference. It can help clarify
the difference between a sociopath and a human being in pain. My wife
is trying to make herself feel better, not trying (as her primary
goal) to mess with my head.