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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they do, the government is buying stocks, and then sells them later either back to the company or to a private investor. Most famously the AIG “bailout” netted the US ~$22 billion in profits when they sold the stock.
Also sometimes the bailouts come in the form of a loan – which comes with interest payments back to the US (e.g. when they gave chase the liquidity to buy WaMu) – again a profitable activity.
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