How does the average taxpayer ever actually end up benefitting point blank?

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

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.

We had that in 2020

Was going to say, gotta check first how long that money was tied up for the profits to really mean anything. How well would that investment have done vs index funds or gold? Or what if you adjusted all dollars for supply?

The gov doesn’t invest in index funds or gold or in any traditional investor way outside of spurring growth.

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.

What do you mean? This action means Trump has removed a bailout. They were going to just give Intel a chunk of money. Now they aren't.

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.

They aren't really losing ownership, they sold ownership at market rate.

> they sold ownership at market rate

No, they did not. The government paid less than Softbank that also just purchased a stake. Unless forced, Intel could have likely gotten a better deal.

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.

> 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.

This isn't nationalizing it though, this is just an investment into it. Investments aren't bad.

Investments can be bad. The market efficiently destroys malallocated capital through competition.

The problem with government taking stakes in private companies is that it creates moral hazard. By taking ownership in Intel, the government has effectively "propped it up". This means that Intel competitors that made less risky decisions to remain solvent are now losing; their bet was Intel was operating poorly, and instead of capitalizing on Intel's downfall so they can fill the gap, the government has plugged the gap. This action distorts markets away from their competitive equilibrium. In the process it generates moral hazard and deadweight loss.

Investments by the government can make sense, but generally it makes the most sense when investments support public goods (arguably also when supporting goods/services that the private market would not). Cpus are neither.

Just like the SVB bailout, or Freddie/Fannie/Sallie establisments, this is bad.

I think the government taking a stake creates additional moral hazard and invites corruption. The melding of corporate and government interests is a slope that is always slippery.