Obama went to Arizona to announce the plan because of the giant number of foreclosures there, but the worst case scenario in his plan is a family that bought in 2006 and is $25k underwater and paying 42% of their income on their mortgage. In reality, most people in trouble in Arizona are over $100k underwater and looking at 50% of their income going to the mortgage. And let’s not even talk about California.
Geithner and Summers probably understand that there’s not enough money in the world to bail out the Bubble in the four Sand States – Arizona, Nevada, Florida, and California. But, by choosing Arizona for his big announcement, Obama signals that he doesn’t likely understand that a plan limited to people 25k underwater will mostly help people in Red States in the middle of the country (think Affordable Family Formation). Obama seems to think his plan will convert the heavily Hispanic Purple States Arizona, Nevada, and Florida to Blue forever.
Obama going to Arizona to announce a bailout plan that's not big enough to bail out Arizonans just shows that Obama doesn't grasp the situation.