Housing and Economic Recovery Act (HERA)

The Housing and Economic Recovery Act (HERA) was a $700 billion financial bailout package passed by Congress in 2008 in response to the subprime mortgage crisis. The act was designed to stabilize the financial system and prevent a major economic collapse.

The act included a number of provisions, including:

* $250 billion in direct assistance to banks, including loans and guarantees.
* $300 billion in purchase of mortgage-backed securities.
* $100 billion in funding for the Troubled Asset Relief Program (TARP).
* $50 billion in tax breaks for homebuyers.
* $15 billion in funding for foreclosure prevention programs.

The act was controversial, with some critics arguing that it was too costly and that it would not be effective in preventing a financial collapse. However, the act is generally credited with helping to stabilize the financial system and prevent a major economic crisis.

In the years since the passage of HERA, the financial system has largely recovered. However, there are still concerns that the act may have created moral hazard, or the incentive for banks to take on excessive risk because they know they will be bailed out if they fail.

The Housing and Economic Recovery Act was a complex and controversial piece of legislation. However, it is clear that the act played a significant role in preventing a major economic collapse. The act is a reminder that the government can play a vital role in stabilizing the financial system and preventing a major economic crisis.