An economic look at medical marijuana

15

Category : General, Legal issues, Medical Rants

The case for legal pot use

A Harvard University professor of economics, Jeffrey Miron, has crunched the numbers, and he’s determined that legalizing marijuana would save $7.7 billion annually in money spent on enforcing dope laws. That breaks down to $5.3 billion in savings for state and local governments, and $2.4 billion in cost reductions at the federal level. This is noteworthy because the FBI reported the other day that more Americans were arrested for pot last year than at any time in U.S. history. And of the more than 770,000 people cited for dope-related offenses, nearly 90 percent were charged only with possession. Those are hundreds of thousands of criminal cases that didn’t have to be taking up the time and resources of our cops and courts. Meanwhile, Harvard’s Miron estimates that tax revenue for legalized pot would run about $2.4 billion annually if it were taxed like all other goods. Yet if marijuana were taxed at rates comparable to the aggressive levies placed on alcohol and tobacco — and it should be — Miron determined that it would yield $6.2 billion in annual revenue. "It’s kind of small potatoes compared to the ($319 billion) federal budget deficit," he told me. "But it’s not nothing." For the record, Miron says he isn’t a pot smoker. His interest in the subject comes instead from a desire to address what he sees as a failed public policy. "As an economist, I think about policies that are good for people and for society overall," Miron said. "This strikes me as very bad policy." And he isn’t alone in this conclusion. Prompted by Miron’s work, more than 500 economists have signed an open letter to President Bush and other public officials calling for "an open and honest debate about marijuana prohibition." The letter adds: "We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods." Signatories include a trio of Nobel Prize winners — Milton Friedman of Stanford’s Hoover Institution, George Akerlof of UC Berkeley and Vernon Smith of George Mason University. "It’s absolutely disgraceful to think of picking up a 22-year-old for smoking pot," 93-year-old Friedman has been quoted by Forbes as saying. "More disgraceful is the denial of marijuana for medical purposes." In his study, "The Budgetary Implications of Marijuana Prohibition," Miron places the illicit U.S. market for marijuana at about $10.5 billion in annual sales. (Figures close to $11 billion seem to be the consensus among people who guess at such things.) Decriminalization would result in lower production costs as dope farming and processing go mainstream. It would also lead to what Miron believes would be only a modest increase in demand because "the people who care about it are already consuming it." Factoring in these two elements, he estimates that marijuana sales in a legalized marketplace would total about $8 billion a year (as opposed to $110 billion in annual U.S. sales of alcoholic beverages). If dope were taxed as heavily as alcohol and cigarettes, Miron calculates that annual sales would be worth almost $12 billion a year. Of this total, 80 percent would represent tax revenue. California would do especially well if marijuana were legalized. As it stands, pot is already the state’s largest cash crop, with annual sales estimated to be about $4 billion. Miron figures that decriminalizing marijuana would result in about $1 billion in law-enforcement-related savings for California, plus about $100 million in additional tax revenue. "That would certainly put a significant dent in a budget deficit of $2 billion or $3 billion," he said.

Where is common sense? Certainly not in the votes of the politicians.

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Comments (15)

the supply of marijauna is plentiful enough, even thhough it is not legal. Mind altering drugs provide an escape from reality and will probably be abused even more by american youth if marijuana becomes as legally accepted as alchohol and cigarettes.

do taxes obtained from “legal” marijuana justify the abuse that america’s youth will probably suffer smoking an even more plentiful and legal substance ?

common sense freedoms for adults quickly become the abused excesses of youth.

as a former youth and now parent of teens, I would vote no
to legislation that legalizes widespread use of marijuana.

No scientific studies are being funded by our government to do research on marijuana, why? Because our government only funds studies showing that marijuana causes some form of harm, and no one can even try to prove marijuana harmful because of how safe it is. The last study our governmnet allowed was to show that marijuana smoking caused lung cancer, not only did that turn out to be wrong, the study also showed that marijuana might prevent lung cancer from cigarettes (Dr. Tashkin.) That’s right, marijuana might prevent lung cancer! Also, I’d like to see anybody stand up to someone with glaucoma and tell them they don’t think marijuana should be legalized for medicine when the only reason that person can still see is because of the marijuana they smoke, which is the only substance known to man that can protect your vision from glaucoma. Or to stand up to someone with MS, which marijuana is the most effective treatment, and tell they they should just have spasm istead of smoking marijuana. Also studies show that teen marijuana use has dropped in states that have medical marijuana.

I have met many, including myself, that are disabled from accidents involving booze, never from marijuana, if Paul really cared about his kids he would want marijuna legal insted of booze

The sheer stupidity of this prohibition is amazing. Some of the TV ads against marijuana are even entertaining. They show some gangsters killing each other because of trafficking. One almost wants to continue: “but here is John Smith, he grows it on his balcony and by doing so, he prevents these crimes from happening”.
There already are laws against driving when under the influence, no reason to prevent people from using it in the privacy of their homes.

“the supply of marijauna is plentiful enough, even thhough it is not legal. Mind altering drugs provide an escape from reality and will probably be abused even more by american youth if marijuana becomes as legally accepted as alchohol and cigarettes”
If the stuff is legal, there’ll be no financial incentive for pushers to sell it in schools. So, there’ll be less abuse not more; certainly less underage kids using it. The prohibition doesn’t do anything but creates more crime and prevents sick people from benefitting.
Incidentally since you support prohibition, would you enlighten me on the logic of forbidding medical use of marijuana? A number of stronger prescription drugs can be legally obtained when needed. Why not marijuana? Because congress thinks they have a right to practice medicine?
BTW. I’ve never used marijuana in my life, but I saw other people use it when I was in college. I didn’t see any of them having any kind of problems.

OK ….lets examine some above statements

1 “That’s right, marijuana might prevent lung cancer! Also, I’d like to see anybody stand up to someone with glaucoma and tell them they don’t think marijuana should be legalized for medicine when the only reason that person can still see is because of the marijuana they smoke, which is the only substance known to man that can protect your vision from glaucoma. Or…”

I do support NIH research to study complentary medicine, including marijuana. I have no argument against this

2. “Incidentally since you support prohibition, would you enlighten me on the logic of forbidding medical use of marijuana?

I am not sure how you made that conclusion. I support
medical use and research of marijuana. I do not support legalization for widespread use. I have no argument against medical use.

3 “If the stuff is legal, there’ll be no financial incentive for pushers to sell it in schools. So, there’ll be less abuse not more; certainly less underage kids using it. The prohibition doesn’t do anything but creates more crime ”

I have not read any articles descibing marijuana as a substance “pushed” by criminals. Do you have data on that topic ? I thought cocaine,crack, heroin, meth, PCP
were the drugs associated with crime.

4..”BTW. I’ve never used marijuana in my life, but I saw other people use it when I was in college. I didn’t see any of them having any kind of problems.”

I am not concerned @ college students, I am concerned about high school and younger kids. If it is a drug that youngsters can easily obtain, I see them using it even more than they do now. (which is plenty)

I think a more fundamental question is why young people feel the need to alter their mental states. I think we have to work on these issues and causes rather than encourage more drug use.

6. “I have met many, including myself, that are disabled from accidents involving booze, never from marijuana, if Paul really cared about his kids he would want marijuna legal insted of booze”

its convenient to argue this way but this is a flaw in logic “false dichotomy” . This flaw occurs when arguments reduce complex problems to two simplstic solutions. I do “really care about” kids, and I do not think legalizing marijuana will help them.

“I have not read any articles descibing marijuana as a substance “pushed” by criminals. Do you have data on that topic ? I thought cocaine,crack, heroin, meth, PCP
were the drugs associated with crime. ”
A quick google on pushers+marijuana+high school as well as marijuana+criminal elements does result in quite a few links. A couple:
http://www.usdoj.gov/ndic/pubs1/1827/marijuan.htm
http://www.mapinc.org/safe/v05/n1814/a03.html
There were quite a few others. The first one shows the amounts of money charged per ounce — clearly enough to attract criminal element. And why wouldn’t it? The Prohibition wasn’t very effective in reducing alcohol consumption, but it certainly was very effective in bringing in mafia.

An interesting statistics that I’d like to see but didn’t have time to look for is some comparison between the rates of marijuana use by children in the US vs in countries like Holland where pot is legal with some restrictions. If you think Holland is too different from the US, maybe there are other countries in Europe where it is illegal and which could be compared to Holland.

By the way, I am not saying that marijuana should be sold for pennies over the counter to any kid with a few bucks. There could be some age restrictions or whatever, similar to alcohol or even to prescription painkillers. But the current “war on drugs” hasn’t been very effective, has it?

the first site provides some information that links crime to marijuana,

the info linking the crime element to other drugs such as cocaine, heroin etc shows even more profits and higher intensities of crime.

from a crime point of view, one could argue that cocaine, heroin, and other drugs should be legalized to minimize the incidence of crime associated with the production and distribution of these other drugs. that arguement is plausible.

My concern is that widespread availablity of drugs to adults will quickly become widely abused drugs among children. Crime is of concern but I am even more disturbed by legalization leading to even more children having access to drugs.

if drugs are legal, the student pusher might very well replaced by much easier suppliers of drugs.

Alcohol is commonly obtained by children who use home supplies of adults. In this scenario there is no pusher, the high from alchohol at home becomes the high before, during and after school.
if marijuana is legal ,then who needs a pusher when many safer adult sources can be found ?

The opposition to legalization of marijuana and other drugs stems from a concern that legalization
will lead to more use and not less.

the hypothesis that legalization will not lead to more widespread might be judged by comparing to Holland but I think the cultural and geographic homogeniety of Holland is quite different from the U.S.

I suppose an experiment could be done by geographic regions. perhaps pick regions in the U.S. and make marijuana legal and then set the legal price at some high level so that some personal sacrifice would be required to by the drug legally ( Kind of like cigarettes which now can sell for 4 dollars/pack and continue to go up in price every year. ) oollect the data for 20 years and anlayse the results.

once could argue as noted in the second web link
that the purchase price of drugs would lessen if legalized or in the case of marijuama it is already cheap:
“That would mean $3 or $4 for a joint of marijuana, which the two toonies you sent your kid to school with for lunch would pay for,” Neville said. “The prices of these things are cheaper than alcohol.”

again, how does making something less expensive lead to less use?

yes the war on drugs has been a failure, I would favor pouring vast resources in addressing the problems that drive children and adults to habitually use drugs.

( I would not abandon the war on drugs because it has been a “failure”. The war on poverty has been a failure but I support the effort. )

Sure there are some habitual users who seem to be fine, but after years of treating people with dependence on mind altering drugs …I see people who have lost too much in search of their high.

Marijuana prohibition is only one facet of the current administration’s absurd Puritan ethics – children can watch brutal murders on television, but national shock results from a glimpse of a breast, let alone “normal” heterosexual behavior. Thus the irrational pseudoscientific mindset extends to HIV prevention, i.e. stilting abstinence-only policies.

Physicians and others who claim to be motivated by objective evidence in any of these health care-related venues should cite their references, if not their archaic religious biases.

Re: medical application of cannabinoid research – GW Pharmaceuticals’ website is worth a look, regardless of their obvious economic bias – some intriguing clinical RCTs worth replicating/expanding in the U.S. academic setting. Anyone who has treated spasticity and neuropathic pain knows our clinical resources are sorely lacking in these areas, and this family of medications merits consideration for use, by scientific standards at least.

My concern about the intense anti-marijuana drug war is that you are really lying to the kids.

You give them endless messages about how pot will kill you, enslave your mind, and make you an addict. The problem is that, then many of them try it a couple of times, realize that doesn’t really happen and then they find out you lied.

So then you tell them that meth, heroin, and cocaine will kill you, ensalve your mind, and make you an addict. Why should they believe you now? These hard core drugs totally destroy people but the kids don’t believe the warnings.

Ectasy is another one. As I understand it some percentage of people will develop hyperthermia from it and die the first time they use it. Most people don’t. So rather than lie to the kids and tell them they are all going to die or rot thier brain, why not emphasize the “lottery ” aspect.

Kids will be kids, however perhaps honesty might be worth more than scare tactics.

hmmmm…..let children try drugs and let them decide if they like them..

please feel free to try this experiment on your children.

You missed the point totally. Did you actually take the time to read what I said?

I never tried drugs of any sort as I had my own family to learn from. My uncle who shot up so much meth he has a case of stimulant induced psychosis. My drunk of a mom, my ice loving sister, alcholic stepdads who beat the crap out of my mom. I was in the middle of the expt.

Most kids don’t have that.

Kids will be exposed to the chance to do drugs. They will be exposed to partial realities of drug use that will contridict the scare tactics on TV commercials.

If you lie to them they will find out and not trust what you say to be true in the future.

Pick your battles and make them the important ones. I will tell my son the truth. Logical, cold, hard, statistical truth. It’s not so common nowdays. He is far too clever to be manipulated by scare tactics.

Feel free to lie to your kids.

I have to agree that economically, legalizing marijuana would only help. Not only would it also lower the crime rate, but it would also lower the rate of use of other drugs. Even though I do not smoke pot I think it would have more positive effects than negative.

so you mean we should lie to our children and tell them pot is the worst thing in the world… so when they do try it (which 85% of them will) they will find that they have been lied too. that is when their doubt about other drugs (E, coke, heroin, etc etc..) will come into question.

The plain fact is that children are taught to question authority. to make decisions for themselves. when you tell someone something is so horrible, and they try it and they dont find it to be horrible they will not trust the truth about other drugs that are indeed deadly and degrading.

instead of lying to them, tell them the truth, tell them that marijuana isnt as bad as the government would like everyone to beleive. BUT the other drugs like coke, E, LSD, heroin.. they are harmful and should never be used.

Very interesting read, I like to think of myself as being rather up to date with the current “pot” scene. Although I must admit that I was unaware that this information existed. This issue seems to be one of many where the numbers don’t lie, yet the public still doesn’t seem to catch on. Perhaps it is the massive amounts of droning propaganda by the anti drug groups, or a general lack of interest on many peoples parts. Either way, this is one of the more barbaric scenarios in our current system….it is very nice to see folks spreading the good word!

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