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.
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Can you give a specific example?Becuase usually this is exactly what happens, the failing bank/Company gets boughts by the government and they then invest more money into their own company.This happened for example with Lufthansa in Germany during the Covid pandemic.
Sometimes the “bailout” can also just be a loan, i think the Obama governmetn gave one to Tesla that was then just paid back. Giving a loan is less risky than taking the stock because the lender will get their money first while the Shareholder only get what’s left in the end if the company is liquidated.
Maybe with a bank that’s not so relevant but think of companies like Volkswagen with huge production plants, patents, etc.
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