In December 2007, caused by the real estate bubble, what is known as the Great Recession (“The Great Recession”) began. Before that, people continued to buy homes with high-risk loans, because their mortgage-backed securities technically generated profits when the values ​​of the homes increased; however, when the value of homes began to decline, those bonds became worthless, so people were unable to pay for their homes – many people had their homes seized. As a result of this loss of wealth, consumer spending dropped dramatically and many banks failed. The US government tried to combat this problem, but many of the tax policies it created were controversial due to their interference in the economy. A debate has raged over whether the government should spend its money to stimulate the economy by cutting taxes and creating jobs. Although it is argued that the government should not play an excessive role in the economy, implementation of the American Recovery and Reinvestment Act was clearly the best option because it prevented the worst-case scenario of economic failure – one like the Great Depression – that would have could otherwise it would have happened without it. The American Recovery and Reinvestment Act, or ARRA, also known as the stimulus package, was signed into law by President Barack Obama with the primary goal of combating the economic crisis. The measures are worth $787 billion, which include tax cuts, expansion of unemployment benefits and other welfare provisions, and domestic spending on education, health care and infrastructure, including the energy sector (“ About ARRA ”). In the votes, the bill was approved first in the House and then in the Senate; no Republicans voted for the bill in the House, and no Democrats... middle of paper... the stimulus failed." New York Post. NY Post, January 29, 2012. Web. May 15, 2014. The meltdown. Public Broadcasting Service, n.d. Web. May 20, 2014. “Report on President Obama's Stimulus Bill Three Years Later.” “The Five Biggest Failures of President Obama's Stimulus Bill.” 2012. Web, May 15, 2014. “Third Quarterly Report on the Recovery Act: Tax Relief and Income Support Provisions.” U.S. Government, n.d. Web. Romer, Christina D. “Fiscal Stimulus, Imperfect but Valuable.” New York Times NY Times, October 20, 2012. Web. May 15, 2014 Obama's economic stimulus worked." U.S. News. US News, June 20, 2012. Web. May 15, 2014."What the stimulus accomplished." The New York Times. NY Times, February 22, 2014. Web. May 15 2014.