Billionaire investor Chamath Palihapitiya believes the government's trickle-down economics approach to stimulus during COVID-19 pandemic hasn’t worked — and it’s exacerbated inequality through distorting markets.

The 43-year-old investor, who was already well-known on Wall Street and Silicon Valley, emerged as a voice for the retail investor class during the pandemic after a CNBC interview in early April.

At the time, the CEO and founder of Social Capital and chairman of Virgin Galactic (SPCE) lambasted the government bailouts of corporations — particularly ones that engaged in massive stock buyback programs to boost share prices. He made his remarks as the Treasury unveiled a list of companies who received government funding to keep workers on their payrolls.

Palihapitiya told Yahoo Finance in a recent wide-ranging interview that there were “not enough first principles thinking by the Federal Reserve and Treasury.” He referred to the philosophical framework of examining problems that begins with principles that you believe have no assumptions baked into them.

According to Palihapitiya, if officials had used that framework, they'd start by looking at the primary source of the gross domestic product (GDP) in the U.S. — and ensure consumers had enough money to keep spending.

"The majority of GDP in the United States has always come from consumers,” he explained.

The coronavirus stimulus included a one-time $1200 payment to those making less than $100,000, but that amount has been widely deemed insufficient as the crisis drags on.

If the government wanted "to make sure that consumers continue to spend because you wanted to see GDP go up, you'd focus on income in their hands. And what you would do is probably give them enough money so that the amount of money they had exceeded the amount of money they needed to live," Palihapitiya added.

He lauded the U.S.’s economic model, which he argued was “how we've inoculated ourselves from corruption and kleptocracy and, you know, the things that that...plague many other countries, including developed western countries.”

Palihapitiya argued that by putting that money directly in the hands of consumers, it would result in increased spending of those excess dollars, allowing for businesses to staff up and rehire and reactivate supply chains.

"What you would have is a slow rebuilding of the economic vitality in America. Instead, we didn't think from first principles,” he told Yahoo Finance. “And we did what we've been doing for the last 40 years, which is this top-down idea that trickle-down economics works, and it doesn't work anymore.”