>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.
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.