[ataggart]

>Suppose a dollar of this loan has an expected value of 99 cents for the bank, while generating $2 worth of taxable economic activity at a 10% rate.

Apart from miscalculating the expected returns or mispricing the resulting goods and services, I'm having a hard time imagining a realistic scenario in which increased economic activity from a capital injection can result in increased tax revenue to the state but not increased interest revenue to the lender.