Help the economic crisis by legalizing pot?

By Juliane Huang On March 19, 2009 · 6 Comments

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With the U.S. financial situation falling to new depths, pundits, personalities, and potheads alike have joined forces on a previously quiet, but currently uproarious issue: whether the American government should legalize marijuana.

Stocks keep tanking, credit is as structurally sound as Swiss cheese, and our nation pretty much owes 100% of our GDP. State and federal head honchos are starting to seriously consider flipping sofa cushions for the fleeting satisfaction of finding a few lost coins.

No one believes legalizing ganja is going to erase our deficit completely, but at this point, slowing the money hemorrhaging out of our already tapped out arteries might be nice for a change, no?

All moral debating aside, Matador has decided to look at this issue from a numbers standpoint.

$35 billion – The estimated value of total marijuana crops grown in the U.S. each year.

$2.4 billion – The estimated potential tax revenue earned if the U.S. taxed marijuana like all other consumer goods.

$6.2 billion – The estimated potential annual tax revenue earned if the U.S. taxed and regulated marijuana like alcohol.

$11 billion – The estimated cost to U.S. taxpayers for total annual marijuana arrests.

over $100 million – The estimated amount the U.S. government spends each year for the National Drug Control Strategy (of which marijuana is the primary target).

Of course, readers must take these numbers with a grain of salt. Economists can only provide broad estimations for a crop that remains essentially illegal and therefore, difficult to track financially. That being said, since these types of formal studies have been released, over here.

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Juliane Huang

Juliane Huang currently writes for Matador from the beautiful city of San Francisco. With a laptop in one arm and a travel bag in the other, Juliane is rarely at home, though always online. Catch up with her on her blog.

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Jacob B.

A very well-reasoned argument…but I think the problem rests w/ that “100 Billion” at the end. Stopping drugs is a productive good–that 100 Billion is going to people who are either building things to stop the drug trade (patching up that tunnel running under the border) or employing people to stop the drug trade. These people, by an large, don’t purchase marijuana.

Meanwhile, marijuana itself is a recreational commodity…something we get when we have plenty. Pull 100 billion dollars worth of salaries out of the mix, and suddenly the dope smoker will be competing with an out-of-work border guard for lead juicer position at the Scottsdale Jamba juice.

I’m also no economist, but the “value” of weed would probably drop, once drug cartels are allowed to drive across the border, virtually untouched, w/ semi-loads of the stuff. That would probably GREATLY reduce all of those tax revenue numbers.
Eva Holland

Amazing, the numbers involved!

Foreign Policy makes a similar-ish argument, from the “legalize to stop the drug wars in Mexico” angle:

http://experts.foreignpolicy.com/posts/2009/03/17/the_case_for_a_domestic_marijuana_industry
http://wayworded.blogspot.com/ Hal

That arrests figure is the most staggering to me. Why are so many of my tax dollars going towards arresting pot smokers?
Gregory

I agree, of course, as does Rick Steves. One major problem though. If people smoke pot nothing would get done (which is fine with me as WASP/Puritan workaholism is one of cultural neuroses of the U.S.), but that might mitigate the positive economic impact…
http://thelonglayover.blogspot.com Carlo

Do you really think that if it was legalised that there would all of a sudden be more people smoking pot? I don’t. People who like smoking pot and want to smoke pot, smoke pot.

@Jacob B. – I don’t think if weed was legalised that all the people who were involved in busting potheads would be without work. I would think that these law enforcement agencies would be putting their resources into more important things.

Bottom line, and it’s not a new revelation, the adverse affects of alcohol on society outweigh the adverse affects of pot. This would have been interesting to see as a statistic here too…alcohol related violence vs. marijuana related violence. “gang of youths arrested following pot-fueled brawl” – unlikely.
Gregory

I was tongue-in-check Carlo, but I do think that more people would smoke (drug testing is common in almost all organizations, unfortunately, although I have always refused on first Amendment grounds) and I have no issues with that at all. Many people are now subject to random tests as well a society (the U.S.) where the worker has no rights and labor unions have largely been either destroyed.

Having said that, taxes on Pot would not be significant if you could “grow your own” at little to no cost–else the State or large entities would again control distribution.

But Pot goes against the American Puritan ethic. Pleasure is bad! And the 60′s revolution has not changed that mindset amongst most Americans — look at the Religious Wrong and other fundamentalist groups who sill reign supreme even as they are likely more perverse than others in their daily lives.

Help the economic crisis by legalizing pot?

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