Over 300 economists, including three Nobel Laureates, recently signed a petition that encourages the president, Congress, governors and state legislatures to carefully consider marijuana legalization in America. The petition draws attention to an article by Harvard economist Jeffrey Miron, whose findings highlight the substantial cost-savings our government could incur if it were to tax and regulate marijuana, rather than needlessly spending billions of dollars enforcing its prohibition. Continue reading
|Projected marijuana tax revenues*|
|District of Columbia||2.8|
|* Revenues based on state-by-state marijuana consumption, assuming pot were legalized. Source: Prof. Jeffrey Miron, “Budgetary Implications of Marijuana Prohibitions,” June 2005.|
Source: Tom Bortnyk
Although we are finally seeing signs of improvement, the economic downturn here in the US is far from over. We are still dealing with massive unemployment, failing banks, and soon, rampant inflation from the trillion-dollar “stimulus” forced upon us by the federal government.
There’s also a Mexican drug war brewing on our borders, and the instability caused by the drug cartels could cause a greater influx of illegal immigrants into the United States. That’s a problem if we’re talking about universal health care. It’s also a problem if we’re talking about violent crime, and for that matter, national security.
The remedy for all these problems could literally grow out of the ground. It has always been said that marijuana has medicinal properties; perhaps it is time to let pot nurse our economy back to health.
This is a frightening subject for soccer moms and politicians everywhere, but facts are stubborn things. In an open letter to the President, Congress, and all state governments, more than 500 notable economists, including Nobel Laureate Milton Friedman, argue that legalization of marijuana could not only save the government money, but generate revenue in the billions.
Dr. Jeffrey Miron, a Harvard economics professor, found that regulation and control of marijuana, as opposed to prohibition, would save approximately $7.7 billion in government expenditures on enforcement. Such regulation would ease the burden on the prison system, which is overwhelmed by the large percentage of non-violent drug offenders.
The study also found that nearly $2.4 billion could be generated from normal sales taxation of marijuana, and as much as $6.2 billion in revenue if the drug were taxed similarly to alcohol and tobacco.
Their estimates are based solely on the taxes generated from the sale of marijuana. It does not include other wealth-generating factors, such as job growth and the construction of infrastructure to support the newly-legal industry. Taking all these factors into consideration, as well as the money saved on incarceration and law enforcement, it’s possible that legalization alone could eliminate state deficits and put an end to rising unemployment.
This, of course, says nothing about industrial use for marijuana in the form of hemp products. Hemp is one of the cheapest, durable, and most versatile resources available. It can be used effectively and cheaply in a number of industries, including textiles and even bio-fuels (giving an entire new meaning to “going green”).
Currently, the marijuana trade exists in a purely free market. The survival of the drug in the face of intense public scrutiny and expensive government efforts is a fantastic argument for free-market capitalism. As enforcement tightens its grip, the price of marijuana (currently the cheapest drug on the market) increases, meaning more lucrative profits for the dealers and growers.
These massive profits aren’t a fluke; the last time a popular substance was prohibited, it gave rise to organized crime and gave gangsters like Al Capone.
Why should criminals profit, paying no tax on their income, while taxpayers bear the burden of inefficient and ineffective enforcement? Billions have been spent on drug enforcement with little to no result, except for the growing wealth and power of a black market and criminal operations.
Opponents would argue that legalization would only increase the product’s consumption, and make it widely available to the public, leading us further down the spiral of moral decay. However, surveys have shown that marijuana, the illegal drug, is easier for teenagers to acquire than alcohol, which is legal. This would suggest that regulation of marijuana could lead to a decline in its use among young people, not an increase.
In many ways, it makes sense; if there’s one way to kill an industry, it’s letting the government have a hand in it.
The War on Drugs has been an expensive and inefficient money-pit that has resulted in an increased burden on the taxpayer, for no benefit except a false sense of security. In these troubled economic times, with government spending running rampant, rising deficits, and fragile markets, it seems irresponsible to continue with these failed drug policies. Especially when things look a lot greener on the other side.