"Governments overreact to the threat of terrorism" is an overly charitable way of describing it. It's like describing DRM as "software companies overreacting to the threat of piracy". No, it's not. Most of their motive for DRM is other things, such as preventing sales of used product. Piracy is just the official excuse; it's not their real reason.

Governments don't "overreact to terrorism". Governments seize power and divert money to the politically well-connected. Terrorism is just how they justify it to the public.

You may as well claim that Russia in Crimea is "overreacting to the threat of Nazis in Ukraine".