The Emergency Economic Stabilization Act was enacted in 2008 in response to the financial crisis that threatened the U.S. economy. This legislation aimed to restore stability by allowing the government to purchase distressed assets, particularly from financial institutions, to prevent further economic collapse. The act established the Troubled Asset Relief Program (TARP), which allocated up to $700 billion for these purchases. It was designed to support banks and other financial entities, ensuring they had the necessary liquidity to continue operations and lending, ultimately helping to stabilize the economy during a turbulent period.