I get why a bailout can be important for the economy but I don’t get why the company just gets the money. Seems like tax payer money essentially is “buying” the company to me but they get nothing out of it.
Edit: whoa i woke up to a lot of messages! Some context to my question is that I am not from the US myself but I see bailout stuff in the news and as I understand it, the idea of capitalism is understood that “if you succeed then you make money and if you fail you go bankrupt and fold or get bought out” hence me wondering why bailouts are essentially free money to a company to survive which in my head sounds like its not really fair because not all companies are offered that luxury.
In: 12103
The most ELI5 answer is that it’s a loan, not a purchase.
The bank loaned me money for my house, but they don’t own it (unless I stop paying). They are my creditors, not my owners.
When you buy bonds of a company, you don’t own part of the company, you own their debt. They simply owe you the money.
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