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 could be, and I believe it has happened in the past. But in general, the federal government doesn’t want to run private companies. They aren’t structured for it and don’t necessarily have people with the right expertise. Even worse, they’d be competing against private companies and reducing the private employment figures.
A better outcome would be for the company bailed out to pay back the money required to save it, with interest. Then to put federally mandated controls in place to prevent it from happening again. As opposed to stupidly de-regulating the industry and virtually assuring that it will happen again.
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