Here's what happened.
1: For various reasons, companies started pushing subprime mortgages - basically targeting people who would not otherwise be able to pay for a mortgage by giving them various 'deals' like ARMs.
2: The above was banked on the idea that housing would always appreciate in value. Thus, while a bank might have to issue a foreclosure (or millions of foreclosures), it really wouldn't lose money.
3: The above loans were rolled into what are called credit default swaps. Basically, a number of loans were rolled into various packages, with the idea that, though some borrowers were almost certain to default, certain loans would basically be guaranteed to get repaid (the 'AAA' level).
4: The above default swaps ended up getting run by investment banks, which did not have the same leverage requirements that normal banks did - that is, for every $30 they had, $29 (or more) was funded by various debts. This is a rather risky situation - when more than $2 needs to get paid, they are simply incapable of it.
#1 was evil, #2 was stupid, #4 was simply greed, and #3 was a mix of all three.
But this is not a yearly infusion by any sense. #4 is getting corrected as we speak (and is a huge part of the bailout), while dealing with the other items is obviously on the legislature's mind - #1 has been for some time, even.
This, folks, is why proper regulation is a good thing. Anyone who says otherwise is one of two types of people.
Stupid, or lying.