Silicon Valley investor Balaji Srinivasan concurred with El Salvador President Nayib Bukele's argument that not high taxes but money printing by the Federal Reserve finances the U.S. government.
What happened: On Wednesday, Srinivasan took to X to respond to an earlier address by Bukele at the Conservative Political Action Conference (CPAC) in February.
The video showed the El Salvadorean leader presenting blunt views on U.S. economic policy.
Bukele suggested that high taxes placed on Americans do not truly fund the government. Instead, he explained how the U.S. government finances itself using Treasury bonds, which are essentially paper.
"And who buys the Treasury bonds? Mostly the Fed. And how does the Fed buy them? By printing more money. But what backing does the Fed have for that money being printed? The Treasury bonds themselves," Bukele stated.
Srinivasan reposted the video with the caption, "DC isn't funded by taxation, it's funded by inflation."
See Also: Donald Trump’s Pro-Bitcoin Stance Influenced Ethereum ETF Approval, Analyst Posits
Why It Matters: Srinivasan's endorsement of Bukele's views came amid Democratic presidential candidate Kamala Harris' controversial taxation stance.
At the Democratic National Convention last week, Harris supported an annual 25% minimum tax on the unrealized gains of individuals with income and assets that exceed $100 million. The policy has drawn sharp rebuke from Wall Street.
El Salvador, under President Bukele, has made headlines because of its pioneering embrace of Bitcoin BTC/USD. The world's leading cryptocurrency was adopted as the country's legal tender in 2021.
The pivot is part of a broader economic strategy to leverage the cryptocurrency’s potential for financial inclusion and boost economic growth in the country.
Photo courtesy: Fortune Brainstorm Tech on Flickr
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