Использование '\ b', как предложено senderle
import sys
import time
sys.stdout.write('name=')
last_lenght = 0
with open('names.txt') as names:
for name in names:
sys.stdout.write('\b' * last_lenght) # go back
sys.stdout.write(' ' * last_lenght) # clear last name
sys.stdout.write('\b' * last_lenght) # reposition
sys.stdout.write(name.strip())
sys.stdout.flush()
last_lenght = len(name.strip())
time.sleep(0.5)