Many articles that I’ve stumbled upon lately seem to miss the point of the term “bailout.” And that’s putting it lightly.

This article (sadly, it’s no longer hosted), from the liberal blog Nation of Change, rails against the Federal Reserve system for five paragraphs before mentioning the slightly important detail that all of the loans given to banks or financial institutions “were repaid or are expected to be repaid.”

That seems like a pretty big thing to leave until the sixth paragraph, doesn’t it? Because, up until then, I thought that the Fed was stealing $16 trillion and giving it to… OH. That’s what Nation of Change wants me to think? Well, that’s obviously because Nation of Change is an openly partisan publication and has political goals, right? Wrong.

The Tea Party, Occupy Wall Street, and both major political parties (especially the one that starts with an “R”) have decried the actions of the Federal Reserve in the past months and years. Republican presidential candidate Representative Ron Paul (R-TX) has stated time and again that he would abolish the Federal Reserve system if elected. Governor Rick Perry (R-TX) has called Fed chairman Ben Bernanke’s monetary policy strategy “treasonous.” Former Rep. Alan Grayson (D-FL) called a senior advisor at the Fed a “K street whore,” intimating that she was in bed with D.C. lobbyists. Even the Tea Party and Occupy Wall Street are getting in on the Fed-bashing.

Most of the negative comments focus on Federal Reserve “bailouts” of banks. At an Occupy Boston protest on Columbus Day (or Indigenous Peoples’ Day, if you prefer), one of the most popular chants was, “Banks got bailed out; we got sold out!” The Nation of Change article uses the word “bailout” in the same way, to imply that the Federal Reserve (specifically, in most cases, the Federal Reserve Bank of New York) simply gave money to banks like ING, AIG, Bank of America, and Citigroup.

That. Is. Not. True.

No, not even a little bit.

A “bailout,” according to the Merriam-Webster English dictionary, is “a rescue from financial distress.” Yes, it could be a gift of money, but the way the Federal Reserve does it, bank bailouts are always loans. In fact, the Fed was created in 1913 by the Federal Reserve Act as a central bank (every country needs one) and a “lender of last resort.” So, when banks ask for loans from the Fed, they are charged interest on those loans (which they must pay back), just like any other borrower.

Additionally, the Federal Reserve has run a profit every year since 1913 (even though it wasn’t designed to). In 2010, it made $82 billion in profit and gave $79 billion of that money back to the government. I don’t know of a single corporation that can claim that kind of return on investment (for perspective, the most profitable private company in the world in 2010 was Exxon-Mobil, with a profit of $30.5 billion, or a little more than a third of the Fed’s profit).

A “bailout” the way that most Americans see it is simply the Federal Reserve “secretly” giving money to big banks and corporations that don’t deserve it. In reality, a bailout is a loan, managed by a contract like any other, that must be paid back. If we didn’t have bailouts, our entire economy might collapse.

If you really want to get rid of big banks and corporations gambling with government money (and therefore, your money), then you should be calling for a reenactment of the Glass-Steagall Act. But, of course, none of the people who are clamoring for the Fed’s head on a pike want that (“It’s too much government regulation!”).

• This post was originally hosted on the Tufts University blog Jumbo Talk