Timothy Sumer

A bailout could be done for profit motives, such as when a new investor resurrects a floundering company by buying its shares at firesale prices, or for social objectives, such as when, hypothetically speaking, a wealthy philanthropist reinvents an unprofitable fast food company into a non-profit food distribution network. However, the common use of the phrase occurs where government resources are used to support a failing company typically to prevent a greater problem or financial contagion to other parts of the economy. For example, the US government assumes transportation to be critical to the country's general economic prosperity.[4] As such, it has sometimes been the policy of the US government to protect major US companies responsible for transportation (aircraft manufacturers, train companies, automobile companies, etc.) from failure by subsidies and low-interest loans. Such companies, among others, are deemed "too big to fail" because their goods and ser...