When a company gets bailed out with taxpayer money, why is it not owned by the public now?
In: Economics
Pretend you owned a restaurant during Covid. You’re you’re going bankrupt because the government won’t let you open.
If I lend you $100,000 to get your business through the lockdown do I own your business now?
Of course not. I’d be a creditor, at most you could say I have an interest in the business up to the value of what you owe me. When you pay me back we have zero connection remaining.
That’s the shape most corporate bailouts take to get them through a short-term crisis, especially in banking.
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