The media is not blowing it out of proportion, for once. But people tend to interpret what the media reports in different ways.
Avian flu is a very big hazard looming on the horizon. But so is the Cascadia subduction quake hazard, global warming climate based disasters, and many others.
But don't think it isn't a big deal because the 1918 flu pandemic certainly was. Modern medicine may not be advanced enough yet to handle a repeat.
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