Thursday items.

The Democratic Leadership Council analyzes the Reagan years and supply-side economics.

While Europe drowns in debt, Switzerland is cutting taxes and enjoying a surplus.

Via Bloomberg, Steve Hanke says Estonia, Lithuania and Bulgaria shouldn’t rush to adopt the euro.

At The San Francisco Examiner, E.D. Kain cites supply-side economics critic Jonathan Chait, who argues tax increases lead to balanced budgets.

A few quick points in response.

A) President Bush 41's 1990 tax increase contributed to a recession that caused tax revenue to decline from 1990-93.

B) Tax revenues did then rise above the average revenue trendline around 1994, as the economy recovered and President Clinton's tax increases took hold. Nevertheless, GDP growth in 1993-94 was sluggish compared with previous recoveries.

C) Despite the tax increase's bearish effect, the economy did expand, due in large part to President Clinton's decision to maintain the Reagan sound money policy. The dollar/gold price was stable near $350 from about 1987 to the late 1990s, a tremendous boost for U.S. and world markets.

D) Clinton's passage of NAFTA, another supply-side measure, provided a boost too, as did the fall of the Berlin Wall.

E) The second and more robust leg of the Clinton boom began around 1996, as markets anticipated a 28 percent capital gains tax cut the following year. The bull market that ensued flooded government with revenues.

E) Unsurprisingly, Kain/Chait ignore the politics of tax hikes. President Bush 41 was, of course, defeated in 1992, due in large part to his tax hike. Clinton raised taxes in 1993 and his party in Congress was routed the following year.

Politicos, be careful who you listen to.