Legalization of marijuana

Dr. Giganto

Sports Moderator

So, what do you guys think about the War on Drugs?

My opinion is based on a concept in economics. In any activity that you do, whether it's business, pollution prevention, safety planning, etc., the important thing is that you have to provide the level of service such that cost of providing that service does not exceed the benefit that you receive.

As an example, let's use security at Yankee Stadium. Theoretically, the Yankees could hire 55,000 security guards, and have 1 security guard assigned to each spectator. However, this would be incredibly costly. If you pay the security guards $10 an hour, for 4 hours of security (including pre- and post-game activities), you'd be spending about $2.2 million on security EVERY game. You would have the ultimate in security, and you wouldnt have to worry about anyone causng a fight, running onto the field, etc. But obviously, this is not a financially wise decision.

Thus, the Yankees would need to reduce the number of security guards until they reach a point where they have JUST enough guards to ensure an acceptable level of safety. Note that this level of safety does not have to be 100%. It just has to be the point at which if you want to provide a higher level of safety, you have to incur a higher cost than the benefit of providing that safety.

Now, let's move this example to drugs. I feel that WAY too much money is being spent of marijuana prevention, and that it vastly exceeds the social benefit that we receive from marijuana being illegal.

Here is the data that supports my argument:

According to a 1997 study by the Office of National Drug Control, the federal government was spending $15.7 billion annually, and state governments were spending a total of $16 billion annually, on total drug prevention, bringing the total amount of money spent on drug prevention at $31.7 billion. Note that this was 11 years ago. Taking inflation into account, this would be worth about $40 billion in "today's" dollars, assuming the percentage of government spending that goes to drug prevention has not gone up.

The FBI reported that in 1996, 43% of all drug-related arrests were marijuana-related. Thus, it is safe to assume that at least 25%-40% of all drug prevention spending is spent on marijuana prevention. This gives us a range of $10 billion-$16 billion. For simplicity's sake, let's use the lower number: $10 billion.

However, there is another cost that we need to take into account: The lost tax revenue! If marijuana were legalized, the government could tax it and generate revenue from it. As it stands now, people spend a LOT of money buying weed every year, and the government sees NONE of that money. How much do people spend?

The National Organization for the Reform of Marijuana Laws assumes that the total production of marijuana plants in the U.S. equaled $15 billion in 1997, based on number of plants seized by the government, an estimate of what percentage of total crops were seized (about 1/3rd), the amount that can be extracted per plant, and the price at which it can be sold. Accounting for inflation, that is about $20 billion in potential marijuana production per year.

If that sounds like a lot, think of it this way: That equals about $67 per year for each member of the population. Now, obviously, not everybody in the U.S. smokes weed. But those that do, spend a LOT more than $67 per year. In fact, if only 10% of the population (30 million people) smoked regularly, they would only need to spend $667 per year to reach that $20 billion annual mark. Factoring into account the occasional smokers, that $20 billion number is easily reachable.

So, how much tax revenue can be generated? First off, let's assume the government taxes producers at the 35% corporate tax rate. That's $7 billion.

Then, states can receive tax revenue as well. Let's say conservatively that the average state corporate tax is 5% (looking at this site, it appears to be a quite conservative estimate: Corporate Income Tax Rates--2008). That's another $1 billion in potential tax revenue.

Plus, states often tax certain "bad" products individually. Cigarettes and alcohol, for example. Looking here: State Tax Rates on Cigarettes, we see that the average state charges a $1.00 tax on a pack of cigarettes. Assuming an average price of $5 per pack, that makes a $4 pack before tax, making it a 25% tax on cigarettes!

If the state governments imposed a very modest 5% tax on marijuana sales, that would be another $500 million in potential tax revenue.

Summing all this up, we see that the potential tax revenue that is lost is about $8.5 billion. Add back in our estimated cost of marijuana prevention, and we have a conservative estimate of $18.5 billion.

Do you really think that the social benefit we get from making marijuana illegal is worth $18.5 billion? I sure dont

Think about how many other uses we could have for that money. We could put it toward education, paying back a tiny part of our debt, fixing social security, etc. Shit, you could even spend it on additional prevention of truly dangerous drugs, like heroin and cocaine!!!

Thus, it is my opinion, that the cost of marijuana prevention that we are incurring annually far exceeds the benefit that we are receiving.

Your thoughts?

Suffy

Your 67$ per person is a lot less than most regular smokers, smoke...like I can spend 70$ on weed in one night alone just buying 12 g's ish.

Also you have to add in the amount of munchies that will get bought more often with legalized weed, if people are legally allowed to smoke they will smoke more therefore buy more munchies, go to the movies more often, rent video games.

You then add the money that gets added by the sale of bongs, papers, pipes.

So...legalize weed!

Dakstang

MMA Moderator

Very interesting that you brought this topic up as I have written several papers on this topic this semester.

As a Criminal Justice Major, I realize how much money is spent on Marijuana enforcement.

And that money is wasted. The government has a very bad track record in their justification for criminalizing marijuana. They have not allowed a gornment study on it since the Nixon Administration because that study brought forth some results they did not like.

Decriminalization may be an answer to this. Many states all ready have decriminalized marijuana in which they don't aggresively enforce marijuana laws but if they do come across some the penalties are about the equivalent of a speeding ticket. Of course this is for a small amount so it ensures you are only using it for personal use.

I believe that decriminalization is the way to go because it is a compromise. It keeps it illegal but it is only a minor crime...much like a traffic offense.

Stop talkin' bout stayin' the course
You keep on beatin' that old dead horse
You know they lied about why we went to War
I can't take it no more

A-Bomb

Video Games Moderator

i think it should be legalized i mean, it really isn't that bad... cigarettes are far worse than marijuana is but yet it's legal? i mean weed has been proven to help your eyesight and what not... whatever i dun make the rules :joint:

Dr. Giganto

Sports Moderator

I agree Dak. I think it's at least a step int he right direction. If I'm not mistaken, Canada has decriminalized it. So, possession of a small amount of marijuana is not a crime that you can be arrested for, but drug dealing is. Thus, it shifts the vast majority of the risk to the dealers, and away from the everyday people who oftentimes are well-respected individuals in their communities that use it to relax and mellow themselves out after a stressful workweek.

Dr. Giganto

Sports Moderator

The thing is, marijuana doesn't have the "good ol' boy" network down south like the tobacco industry has.

The tobacco industry has been a strong driver of the economy in the Carolinas for centuries, and thus the individuals/families/companies that have made a fortune off of it can afford to pay lobbyists millions of dollars each year to convince Congress that their industry needs to be protected.

The marijuana industry, even before it became illegal, did not have the same economic infiltration, and certainly does not have the financial resources of the tobacco industry

Suffy

Actually in Canada our stupid government just passed a law on mary jane that makes it far more illegal. I can't remember exactly I read about this in first term but our Harper government passed some law that just crazily cracked down.

But we have medicinal mary jane grown up in Flin Flon.

And we almost had it completely decrimilized it was got passed through the House however an election got called and it got lost in the shuffle and then a new shitty government came in.

Blitzkrieg

Administrator

Awesome post, Tom and I agree completely..

But one thing we need to look at.. is the "cool" factor. I'm sure you remember, as a kid.. it was cool to run off into the woods and smoke cigs with your buddies. Many of these people become addicted to cigarettes, but those that don't.. quickly grow out of this phase and are probably thinking as I do.. that they're disgusting and a complete waste of money.

Lets compare that to marijuana. First of all, it's different and much more relatable to alcohol because it gets you fucked up.. but, I know a lot of people who do not drink nearly as much alcohol now as they did when they were under 21 or had just turned 21.

Basically, I'm not sure if the same amount of money would be spent on marijuana if we eliminated the "cool" or "naughty" factor..

Also, how good is the shit going to be if it's regulated by the government? Is it going to be better or worse than what you can get from the neighborhood or a 15 minute drive to an upscale community?

Dr. Giganto

Sports Moderator

When doing research for this post, I came across studies that suggested that marijuana use actually went DOWN in places where it was decriminalized (I believe England was one example). Thats the "cool factor" you're talking about. More people want to do it because it's illegal, not just because they want to get high.

In fact, this goes back to the prohibition of alcohol in the US, which was a colossol failure. Some people think that alcohol consumption actually went UP during prohibition, because nondrinkers started drinking at underground speakeasys, because it became the "cool" thing to do.

A LOT of people in this country smoke weed. I personally know a school principal and a senior VP at one of the biggest financial firms in the World (a 60-year old man) who smoke weed regularly. And they are GREAT at their jobs. They dont display ANY of the social characteristics that marijuana use supposedly gives you.

Now, I realize that's just two cherry-picked examples, but I have to admit I know a lot more people who have fucked up their lives because of alcohol than because of weed

Inogenius

Politics Moderator

I could agree with that. I have a friend who is very successful in the financial sector of business, and he smokes marijuana quite frequently. As his wife said, it doesn't bother her, because he doesn't let marijuana run his life. It's something fun he likes to do, like other people play video games.

I'm not against the heavily regulated legal distribution of marijuana. If it were regulated with a mixture of laws like what we see with cigarettes & alcohol, I would be quite happy to see it legalized. 18 years old, can't be smoked in public places (like bars), and only certain places can sell it.