Philip Shenon writes in the New York Times about a Congressional report that states that the color coded terrorist threat alert system may not really work.

There are essentially two reasons. First, we regular people have no idea what to do. The country goes to orange alert, and we're not sure what we're supposed to do about it. Can I still go grocery shopping? Should that field trip to the nuclear power plant be put off?
Should I call the cops on the Russian mobsters next door? Second, the colors are obviously a little vague. This reason sort of feeds the first one. Instead of telling us what kinds of activities we should avoid, what type of plot might be in the works, we're basically told, "Be a little more careful." To which we respond, "Of what!?"

There's a reason Jay Leno, Dave Letterman, and the political cartoonists of this country (and, I'm sure, numerous others) have lambasted this system practically since it debuted. Granted, these are people whose whole job it is to make fun of things, so they pretty much make fun of anything they find in the papers, but this system is such an easy target, it's impossible to avoid cracking wise about it. I'm having a hard time picturing Tom Ridge or someone actually defending the system with a straight face.

What's better than this system? Anything that promotes less FUD.
Unfortunately, spreading FUD seems to be the one thing this government is really good at. Well, that and taking the credit for dispelling the (mythical) cause of those fears when elections start rolling around.