"Not knowing is scary. It's easier just to be in denial all the time and imagine that you DO know what's going on, because you heard it on the News and the guys that read the News wouldn't repeat a lie, would they?"
It depends on who you think is in denial. I could easily say that conspiracy theorists are in denial.
It is easy to relate to a fanciful story if that can relieve you of your fears, or make your worst fears come true. Sometimes it is hard to accept reality, and that is when we start blindly looking for answers that fit our preconceived notions.
As for the news, I've worked in the industry and I know better than to believe what I hear on the news. Yes, they do report back lies when given to them - but the better journalists check their sources and look for a second source to verify.
You are wrong when you say that they read what they are told to read. No news network that I've ever been in has that ability to fake a story in the fashion that has been suggested. There are too many different news organizations and thousands of reporters that would need to be "in" on the fix. You just do not realize how many people are involved in preparing a story for air.