In brief

  • The Federal Reserve has revealed its plans to spend $2.3 trillion to bail out the economy.
  • Virgin Galactic CEO argues that the money should go to ordinary Americans instead of rich CEOs.
  • He suggested the Fed gives "half a million to every man, woman and child" in the US.

Chamath Palihapitiya, the CEO of investment firm Social Capital and chairman of spaceflight company Virgin Galactic, has argued that the US government and the Federal Reserve should not bail out hedge funds and billionaires during the coronavirus crisis.

“On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are,” Palihapitiya told CNBC’s “Fast Money Halftime Report.”

He noted that the Fed’s spending initiatives and its plans to support enterprises will likely have far-reaching consequences, and authorities should just give those funds to Americans instead.

“What we’ve done is disproportionately prop up poor-performing CEOs and boards, and you have to wash these people out. [...] I’m not disagreeing with what the Fed has to do. What I’m saying is it’s creating a land mine, and it’s creating a bill that will have to come due,” said Palihapitiya.

“It would be better for the Fed to have given half a million to every man, woman and child in the United States,” he added.

Earlier on the same day, the Fed announced it plans to spend $2.3 trillion on various programs to help support the economy during the coronavirus outbreak. The money will be directed toward businesses and governments, including the Fed’s Main Street business lending program and market interventions.

As Decrypt reported recently, Palihapitiya has also stated that we are currently witnessing “Bitcoin’s moment,” as the cryptocurrency could “really emerge as a flight to safety” in case the US economy goes caput.

And with the US national debt hitting $24 trillion, there are a lot more questions than answers.