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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It depends on the country, but in the US, we generally frown on the government owning companies because a lot of people think they’re incredibly bad at running them.
Instead, we force the companies to pay back all the money we lent them, with interest. For example, the government made money off both the auto industry and 2008 financial bailouts, once it was all repaid. It just took awhile.
(Example: TARP cost $426.4 billion in bailouts to banks, but they ended up repaying $441.7 billion in the end.)
The issue is that a lot of people (and they have a point) are upset that the bank’s executives and employees continued to get bonuses and make money while they paid us back.
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