This is a strange comparison. A government is not a household. Government spending, when domestic, doesn't mean that money goes away. It means that the money f

This is a strange comparison. A government is not a household. Government spending, when domestic, doesn't mean that money goes away. It means that the money flows into other parts of the economy. Say, the government gives money to a doctor or civil servant who then spends it, i.e. they give it to someone else in the country, who can then spend it. Often it will relatively quickly flow back through the government again via taxes. Government spending is economic activity, and in many (most?) countries the state is one of the biggest employers and investors in things like infrastructure. In this case, it appears that instead of, say, giving money to a construction company who would than give money to workers and suppliers of materials (who could then spend that money in other parts of the Salvadorian economy) and getting a nice road for the people of El Salvador to boot, the government has instead given money to foreign investors in exchange for Bitcoin, and now those investors, because the magic line has gone down, are saying that the Salvadorian government can't have all the money back for the number of Bitcoin they have. I.e., they've lost out. Of course, there's no way to know which way the line's going to go next, that's part of the excitement of gambling on Dunning-Krugerrands, but it seems rather obvious that there's a very fundamental difference between a government being an economic actor in its country, and a government being an unproductive speculator sending (tax) money abroad.