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  1. RoboCodeine7610
    LEGALIZING DRUGS: THE MONEY ARGUMENT

    Friday marks 75 years since repeal of the Volstead Act, which made the manufacture, distribution and consumption of alcoholic beverages illegal in the United States. As the anniversary of the end of Prohibition approaches, modern advocates of a similar repeal are calling again for the decriminalization of heroin, cocaine and marijuana - and this time they've come packing a money argument by a Harvard economist.

    I like money arguments. They are usually a lot more effective than emotional ones or those that exploit stubborn prejudices with the intent of maintaining the status quo.

    As the American economy recedes, state and local tax revenues fall and government budgets are cut, the money argument for changing the way we do things - from enforcing the laws to educating children - makes the most sense and has the strongest appeal.

    I've made the argument in this space for more government investment in drug treatment, criminal rehabilitation and ex-offender services - and not just because it's the humane thing to do, but because it's the common-sense thing to do.

    We have the highest per capita incarceration rate in the world, and fancy revolving doors on an expensive prison system that takes back, within just three years, more than half of all inmates it releases. We keep financing public failure on a scale that would never be tolerated in private enterprise.

    Politicians who hold office and pass laws somehow have convinced us that, if the prison system is broken, we don't need to fix it. Law-and-order types want us to believe they are protecting us from violent criminals, and they are, of course. But they've also created and financed a recidivistic system that does little more than warehouse 1 million-plus American adults until they're released, usually to the same environment and influences that got them in trouble to begin with.

    With some education and training, a much higher percentage of these inmates might become productive citizens. A wiser investment of tax dollars might mean more of them staying out of our taxpayer-funded prisons longer - if not for good. Teach a guy a skill, give him a crack at a decent job despite his criminal past, and we might even be able to close prisons instead of building wings on them.

    Advocates for narcotics decriminalization have been saying for years that the war on drugs has cost American taxpayers billions of dollars with little to show in benefit, and they're correct. Today in Washington, Law Enforcement Against Prohibition, an organization of former cops and veterans of the war on drugs, will release a study giving the money argument for their cause.

    Harvard economist Jeffrey A. Miron's report, funded by the pro-repeal Criminal Justice Policy Foundation, looked at arrest and prosecution of drug crimes across the country, as well as taxation rates for Americans' legal vices - tobacco and booze. The Miron report assumes two things - that full legalization will mean savings in law enforcement costs and that the state, local and federal governments will see new revenues once coke and heroin are controlled and taxed.

    Miron reached the following conclusions:

    .Legalizing drugs would save roughly $44.1 billion per year in government expenditure on enforcement of drug laws, with about $30.3 billion of this savings going to state and local governments and the rest staying in the U.S. Treasury.

    .Drug legalization would yield tax revenue of $32.7 billion annually. That's assuming legal drugs are taxed at rates similar to those on alcohol and tobacco. About $6.7 billion would come from sales of legal marijuana, $22.5 billion from sales of cocaine and heroin and the remainder from the sales of other drugs now prohibited.

    The report addresses my personal sticking point when it comes to repealing the drug laws: that lifting the prohibition will likely increase sales of drugs; people not now addicted will become addicted.

    But, in projecting tax revenues, Miron assumes there would be no shift in the demand for drugs, that it will stay about the same. "This assumption," the report says, "likely errs in the direction of understating the tax revenue from legalized drugs, since the [existing] penalties for possession potentially deter some persons from consuming."

    Miron makes an interesting distinction between legalization and decriminalization. The latter means repealing criminal penalties for possession but keeping them for drug trafficking. Full legalization eliminates arrests for possession as well as trafficking. The advantages of full legalization are greater than those for decriminalization, Miron says, because legalization saves substantially more in prosecution and incarceration.

    "Whether drug legalization is a desirable policy depends on many factors other than the budgetary impacts discussed here," Miron says. "Rational debate about drug policy should nevertheless consider these budgetary effects."

    For years, I've discussed decriminalization with friends and colleagues, debated it with the legendary Baltimore defense attorney Billy Murphy and LEAP leader Jack Cole, considered all the practical arguments and struggled with the prospect of another set of addictive, brain cell-burning substances in America's selection of legal poisons.

    I've written numerous times about drug addiction and the need to treat it as a medical problem and not a criminal problem. I've spoken to hundreds of drug addicts and recovering drug addicts and seen the devastating effects of heroin and cocaine on their lives and the lives of their spouses and kids.

    The money argument for repeal is interesting, and for some people Miron's estimates might close the deal. But I'm not there yet. Make heroin and coke legal and we'd have more drug addiction, more dysfunctional people in our midst, and we've got our hands full now.

    Link:http://www.mapinc.org/drugnews/v08/n1083/a10.html?397

Comments

  1. Nature Boy
    "I like money arguments. They are usually a lot more effective than emotional ones or those that exploit stubborn prejudices with the intent of maintaining the status quo."

    Damn right. When it comes to government, money arguments are the only things that should really matter. It's by far the most compelling approach to tackling the problem of drug prohibition bypassing all this wishy-washy nonsense about emotions, family and communities. Those things take care of themselves when a nation flourishes with an abundance of revenue that gradually improves the standard of living for all. Law enforcement should be about protecting people and guarding the peace, not invading people's private homes and throwing them in the slammer for fiddling around with a few plants. I agree very much with the sentiments put forth in this article.
  2. chillinwill
    Legalize drugs, gain $77 billion

    Here are excerpts from the Harvard study undertaken by Jeffrey Minor, an economics professor.

    Government expenditures
    "This report concludes that drug legalization would reduce government expenditure by $44.1 billion annually. Roughly $30.3 billion of this savings would accrue to state and local governments, while roughly $13.8 billion would accrue to the federal government. Approximately $12.9 billion of the savings would results from legalization of marijuana, $19.3 billion from legalization of cocaine and heroin, and $11.6 from legalization of all other drugs."

    "The estimates are ballpark figures that indicate what order of magnitude policymakers should expect from legalization."

    "To estimate the state and local savings in criminal justice resources, this report . . . estimates the percentage of state and local arrests for drug violations and multiplies this percentage by the state and local budget for police. It estimates the percentage of state and local felony convictions for drug violations and multiplies this percentage by the state and local budget for prosecutors and judges. It estimates the percentage of state and local incarcerations for drug violations and multiplies this percentage by the state and local budget for prisons. It then sums these components to estimate the overall reduction in state and local government expenditure. Under plausible assumptions, this procedure yields a reasonable estimate of the cost savings from drug legalization. "

    Taxes
    "In addition to reducing government expenditure, drug legalization would produce tax revenue from the legal production and sale of drugs. To estimate the revenue, this report employs the following procedure. First, it estimates current consumer (retail) expenditure on drugs under prohibition. Second, it estimates the expenditure likely to occur under legalization. Third, it estimates the tax revenue that would result from this expenditure based on assumptions about the kinds of taxes that would apply to legalized drugs."

    "Legalization would also generate tax revenue of roughly $32.7 billion annually if drugs were taxed at rates comparable to those on alcohol and tobacco. Approximately $6.7 billion of this revenue would result from legalization of marijuana, $22.5 billion from legalization of cocaine and heroin, and $3.5 billion from legalization of all other drugs."

    Demand
    "This report assumes there would be no shift in the demand for drugs. This assumption likely errs in the direction of understating the tax revenue from legalized drugs, since the penalties for possession potentially deter some persons from consuming. Any increase in demand as a result of legalization, however, would plausibly come from casual users rather than heavy users, since heavy users are the ones with strong desire to consume drugs and are therefore already consuming despite prohibition. Any increase in use might also come from decreased consumption of alcohol, tobacco or other goods, so increased tax revenue from legal drugs would be partially offset by decreased tax revenue from other goods. Forbidden fruit effects from prohibition might also tend to offset the demand decreasing effects of penalties for possession. Thus, the assumption of no change in demand is plausible, and it likely biases the estimated tax revenue downward. "

    Lower drug prices
    "Under the assumption that demand does not shift due to legalization, any change in the quantity and price would result from changes in supply conditions. Two main effects would operate. On the one hand, drug suppliers in a legal market would not incur the costs imposed by prohibition, such as the threat of arrest, incarceration, fines, asset seizure, and the like. This means that, other things equal, costs and therefore prices would be lower under legalization. On the other hand, drug suppliers in a legal market would bear the costs of tax and regulatory policies that apply to legal goods but that black market suppliers normally avoid. This implies an offset to the cost reductions resulting from legalization. Further, changes in competition and advertising under legalization can potentially yield higher prices than under prohibition."

    Posted by Dan Rodricks
    On December 2, 2008 6:23 PM
    Balitmore Sun
    http://weblogs.baltimoresun.com/news/local/rodricks/blog/2008/12/legalize_drugs_gain_77_billion.html
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