A Wells Fargo analyst thinks a "fear monger" campaign is one reason the U.S. economy fell as far as it did, as fast as it did.

Jim Paulsen, chief investment strategist for Wells Capital Management, said officials in Washington, D.C., used fear of dire consequences to propel the $700 billion Troubled Asset Relief Program through Congress.

But as far as economic behavior, fear also froze everyone in their tracks.

"Our primary problem is not high consumer debt, it's not global recession, it's not a credit freeze. It's a complete player freeze," he said.

Certainly, some consumers were in trouble because of mortgage issues or high debt. But even people in good financial shape postponed purchases, Paulsen said. So a credit-worthy consumer who was going to buy a car in September might have decided against it, or a small business instituted a hiring freeze until it becomes clear how things will shake out.

In terms of economic growth, fourth quarter 2008 will be bad, and first quarter 2009 won't be much better, he said. But that could change in the second half of the year, pushed by massive federal spending to stimulate the economy.

There also will be pent-up demand. "The person that was going to buy a car in late summer this year is going to have to buy a car next year, even if they're not feeling so good about it," he said.

Wells Fargo senior economist Scott Anderson was less optimistic.

He expects the decline to be long and deep. He estimated the U.S. unemployment rate could hit 8.8 percent and net job losses could top 5.5 million. He doesn't anticipate a turnaround being until June at the earliest.

Anderson noted that massive federal spending in 2009 and 2010 could move the deficit to 9 percent of Gross Domestic Product; anything over 6 percent prompts him to worry about nasty consequences like currency collapse.

Anderson said new home construction could be a bright spot, which might begin to rebound from its worst slump since the Great Depression.

Paulsen and Anderson made their comments during a 2009 economic outlook forum.

Business Editor Tom Mast can be reached at tom.mast@trib.com, or call 307-266-0574.