With the collapse of the financial markets, Americans are watching as, quite literally, the narrative of the rest of their lives unfolds before them. On Oct. 3, and after much partisan wrangling, President Bush signed the roughly $700 billion Emergency Economic Stabilization Act to invest taxpayer money in failing business on Wall Street and increase government oversight in an effort to stem already catastrophic losses.

Despite its complexity, observers generally agree the crisis was precipitated by the so-called era of easy credit, when American companies lent investment capital freely, particularly in the sub-prime mortgage markets. As the economy slowed, banks began to suffer as individuals defaulted on mortgages they could no longer afford. 15 banks have failed in 2008 alone and the past several weeks have seen the collapse and/or bailout of financial giants Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch and Wachovia. Multi-billion dollar losses, coupled with rising fear on Wall Street resulted in panic on the floors of stock exchanges in New York and across the world.

The bill signed into law by the President on Oct. 3 is frequently described as a “bailout.” The bill is designed specifically to support banks burdened by the collapse of the mortgage markets. The $700 billion figure remains an estimate and, as Secretary Paulson says, the bailout could end up costing significantly more.

In an effort to stabilize the markets, the president and Treasury Secretary Henry Paulson announced this week that the U.S. government will begin injecting capital directly into struggling financial institutions.

According to CNBC, Paulson said such an unprecedented move was “necessary,” “more efficient” and would let “taxpayer money go further.”

“This is a plan I am quite confident will work,” he said.