It is unclear why all the financial fear-mongering, gloom and doom routine is really needed. The president has his votes to pass the stimulus bill, but he persists in trying to scare the dickens out of the public. As Roger Simon notes:

Barack Obama has a tough act to pull off. He must simultaneously petrify people and also restore their confidence. He must scare us to death and calm our fears.

He must convince the nation that the times are so dire we must carry out his bold plans immediately, and then he must persuade us to be patient and give his plans time to work.  .  . He used phrases like “full-blown crisis” and “vicious cycle.” And he said that unless we do something quickly, “we may be unable to reverse” the crisis we face.

Yes, he needs to get Congress to move and, yes, he wants to lower expectations to buy himself some political breathing room, but the whole stimulus hocus-pocus (“Look we passed a bill spending bill and confidence has returned!”) depends on people not really believing we are on the precipice of the greatest economic calamity since the Great Depression. (Does no one remember double-digit inflation and unemployment under Jimmy Carter?)

Tim Geithner announced his bailout plan today. The markets promptly tanked. Perhaps they expected more, given the perilous times in which we live. As David Malpass explained:

President Obama has been highlighting the negatives in the U.S. outlook. The market’s default assumption is that conditions will get worse for quite a while. Geithner didn’t dispute this. I think the administration should attack head-on the Great Depression analogies and the claims that the U.S. is a bankrupt nation. It has to decide that it is planning for recovery, not a drawn-out nationwide debt-restructuring program. Otherwise, the downward momentum is self-fulfilling, causing needlessly high unemployment.

Indeed, the businesses which will need to decide whether to lay off more workers, consumers who will need to weigh the benefits of saving vs. spending and investors who will have to decide between, for example, gold and the stock market better not be paying any attention to Obama’s histrionics. Otherwise this “stimulus plan” is going to be one big, very expensive bust.