The basic cause of the global financial problem was that the U.S. government, along with other governments, engaged in excessive credit expansion and pressured banks to make loans – particularly home loans – to unqualified buyers.

Therefore:

1.       We believe that responding to the credit crunch by adding more liquidity in the market is a short-term fix that will only help banks that were mismanaged, and will fuel inflation.

2.       We believe governments should facilitate, and not hinder, the process of the market determining prices that realistically reflect supply and demand.

3.       When hard times come, governments should share the burden with businesses and consumers and not try to insulate themselves from the harm they have caused.

4.       Governments should refrain from rescuing particular businesses or business projects. The cost of saving businesses that failed will fall on the shoulders of others, through increased taxes, inflation, or capital misallocation.

Free market capitalism has proven to be the only system which leads to sustained economic progress and respect of human liberty.

Signed,

Lithuanian Free Market Institute, Lithuania

Institute for Global Economic Growth, US

Institute for Fee Enterprise (IUF), Germany

Institute for Market Economics, Bulgaria

Friedrich von Hayek Foundation, Slovakia

New Economic School, Georgia

Liberalny Institute, Czech Republic

Hayek Institute, Austria

Adam Smith Research Centre, Poland

European Center for Economic Growth, Bruxelles and Vienna

Institute for Research on Economic and Fiscal Issues (IREF), France

Contribuables Associes, France

Instituto Bruno Leoni, Italy

Project Lodz, Poland

Association for Liberal Thinking, Turkey

CATO Institute, USA

Mises Scientific Research Centre, Belarus

Estonian Free Society Institute, Estonia

Institute for Economic Studies, France

The TaxPayer’s Alliance, UK

Ludwig von Mises Institute, Poland

Competitive Enterprise Institute, USA

Ioan Barbus Foundation for Freedom, Tradition and Capitalism, Romania

Liberales Institut, Switzerland

Institut Constant de Rebecque, Switzerland

European Taxpayers Association

Association pour la Liberte Ecomique et le Progres Social, France

Paneuropabewegung, Austria

Liberte Cherie, France

Conservative Institute of M. R. Stefanik, Slovakia

European Policy Network, UK

To speak to signatories of this document, please contact Remigijus Simasius, Lithuanian Free Market Institute at +370 655 17190, Pierre Garello, Institute for Economic Studies at +336208948656.