Comment by bcrosby95
14 hours ago
If shareholders are losing ownership it's less a pure bailout and more a strategic investment and/or takeover. It also potentially lets the average taxpayer benefit rather than just those its directly propping up.
14 hours ago
If shareholders are losing ownership it's less a pure bailout and more a strategic investment and/or takeover. It also potentially lets the average taxpayer benefit rather than just those its directly propping up.
Here I thought the point of a grant/subsidy is that it allows companies to take risk - by setting up factories, funding research without worrying about the monetary cost etc.
Government benefits through one, generating employment - direct and indirect employment, raising taxes through personal taxes (indirectly impacting tax collection) or second the country being at the forefront of the innovation etc. That is how average tax payer was supposed to benefit.
But I guess trying to nationalize companies and "benefiting" from company profits was something people were missing. How did no one see that? Ah yes, third world countries try this routinely for "national security" and it always leads to moral hazard pointed out by the person above you.
How does the average taxpayer ever actually end up benefitting point blank?
Not that I agree with bail-outs, but 2008 financial crisis that resulted in a number of bail outs actually netted the treasury a profit.
> In total, U.S. government economic bailouts related to the 2008 financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion
https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
I don’t think that really counts if there has to be a giant campaign of quantitive easing by printing dollars alongside.
2 replies →
Was that profit diverted from companies that were better managed and didn't get a bailout? We can see who won. Who lost? And why is the government deciding winners and losers? Why especially when the government is one of those winners?
To be clear, that bailout was passed by the Congress. This is a new phase of the President gets to just bail out anyone.
1 reply →
Profits from the stake lower taxes that would otherwise be levied on you? Of course that’s moot if the deficit isn’t something being taken seriously.
Deficits aren't real and 10% of $0 when they likely go bankrupt is $0
They aren't really losing ownership, they sold ownership at market rate.
This has worked REALLY well in countries like India. Where it resulted in the ability to be badly run, AND be excluded from market pressure. Which resulted in corruption and a drag on the economy.
There are governments which can take a stake and be ok, and then there are governments which are setting up to set money on fire.