Emergency Economic Stabilization Act (EESA) of 2008

In 2008, the U.S. economy came close to collapsing, because financial institutions had over-invested in securities tied to subprime home mortgages. The subprime mortgage market collapsed, and the poisonous debt based on those loans infected the entire system. For a while, things seemed pretty grim.

In order to prevent the crisis from triggering a second Great Depression (as some commentators feared it would), the government stepped in with a bailout program. That bailout was officially called the Emergency Economic Stabilization Act.

The initiative gave the Treasury Department $700 billion to buy certain assets, including mortgages, to calm financial markets and help the companies that were holding the toxic securities on their balance sheets.

The Emergency Economic Stabilization Act was one of a number of bailout programs launched in the wake of the financial crisis. The U.S. did enter a sharp recession that had significant long-term impacts, but the worst-case scenario was avoided, most large institutions were saved (RIP Lehman Brothers), and the economy slowly recovered over the next several years.