It seems wrong that this card has been around since the beginning of the game and has never gotten a review. In fact, this is the "random" weakness you put in the original Roland Banks starter deck for the original core set, so for many this is the first generic weakness they were exposed to. How does it set the bar for other weaknesses? What does a new player think when they see this card hiding in their deck?
Short answer, it sucks. I find this to be one of the more damaging weakness cards you can get (although I do also tend to play the kinds of decks it punishes the most). That said, I do think this actually is quite a good tool to teach new players some important lessons about Arkham Horror. Let me explain:
This card teaches that some decks have more trouble with certain situations than others. Play a character without a lot of economy who likes to save up for expensive assets (i.e. guardians, especially way back in the core set when guardians didn't have the economy they have now) and this card can be back breaking. Play a character who has good economy, or who usually doesn't play expensive stuff, and the weakness is almost trivial. The fact it's the weakness in the OG Roland deck is kind of mean if you ask me, since that's the exact deck it's the worst in.
This card teaches that you should play around your weakness, but sometimes it's just luck when you draw it. It highly encourages playing things as soon as you can, and not sitting around with resources unspent. If this gets drawn right after a big turn when you spent all your resources on a shiny new gun then it's a non-issue. If it gets drawn the turn before you spend all your resources on a shiny new gun then you are very sad. That's kind of good advice for the game in general. Use your tools to accomplish "good enough" right now. Don't wait around for "perfect" since that may never happen and you're always one bad draw away from getting wrecked. I guess it is a case of smacking new players until they learn to play better.
This card teaches that Arkham Horror is cruel and doesn't care about your feelings. Especially in the first few campaigns the developers made it very obvious that the game hates you and is actively trying to ruin your day. That design philosophy seems to have ebbed over time but is still present to some extent.
All of these are very good lessons for a new player to learn, although learning them can be very un-fun. This card is also bizarrely thematic. When you know it's in your deck you do indeed get paranoid. As my deck gets thinner I often find myself deliberately not triggering my "draw a card" abilities because I really don't want Paranoia to come out right now...
Overall I find this to be a worse than average weakness. The average weakness seems balanced around ~3 actions worth of punishment and maybe an additional small slap in the face. This can easily wipe out 5, 6, or even more actions worth of effort if you draw it at a the worst time (and unfortunately "the worst time" for this weakness happens surprisingly often).
I do think it has gotten far easier to manage over time though, since we have access to many more cards that accelerate economy and we are less dependent on very expensive assets. That takes a very bad weakness and brings it more in line with less horrible ones.