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ECONOMICS

  • by Erik Altieri, NORML Communications Director April 17, 2012

    Over 300 economists have signed on to an open letter to the President, Congress, Governors, and State Legislators asking them to allow this “country to commence an open and honest debate about marijuana prohibition.” The petition states that the undersigned “believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods.”

    Notably, three of the economists who have already signed on are Nobel Laureates. Three hundred plus additional economic scholars have already signed on, you can view the list and more details here. Full text of the petition letter is below:

    We, the undersigned, call your attention to the attached report by Professor Jeffrey A. Miron, The Budgetary Implications of Marijuana Prohibition. The report shows that marijuana legalization — replacing prohibition with a system of taxation and regulation — would save $7.7 billion per year in state and federal expenditures on prohibition enforcement and produce tax revenues of at least $2.4 billion annually if marijuana were taxed like most consumer goods. If, however, marijuana were taxed similarly to alcohol or tobacco, it might generate as much as $6.2 billion annually.

    The fact that marijuana prohibition has these budgetary impacts does not by itself mean prohibition is bad policy. Existing evidence, however, suggests prohibition has minimal benefits and may itself cause substantial harm.

    We therefore urge the country to commence an open and honest debate about marijuana prohibition. We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods. At a minimum, this debate will force advocates of current policy to show that prohibition has benefits sufficient to justify the cost to taxpayers, foregone tax revenues, and numerous ancillary consequences that result from marijuana prohibition.

    You can view media coverage of this effort here.

  • by Paul Armentano, NORML Deputy Director April 3, 2012

    Ex-Drug Czar and lifelong (selective) prohibitionist William Bennett recently took to the mainstream blogosphere to criticize Pat Robertson’s ‘born again’ public support for marijuana legalization.

    Bennett’s specific criticisms of legalization — that it would simultaneously allow for “open and unrestricted drug use” by all, and that the plant’s perceived social costs would outweigh any economic benefits reaped by regulation — are predictably well worn, but they are nonetheless worth addressing.

    An excerpt of reply to Bennett is included below. You can read the full commentary here.

    Health and Societal Costs of Marijuana vs. Alcohol and Tobacco: Prohibitionists’ Concerns Answered and Refuted
    via Alternet.org

    Bennett’s latter charge — that regulating cannabis would dramatically increase societal costs — deserves more critical analysis. Bennett bases this allegation largely upon the premise that present taxes on alcohol and cigarettes fail to adequately pay for the social costs associated with these drugs’ use and abuse. True enough and perhaps a persuasive argument if, in fact, one was debating whether to criminally prohibit the use of booze and cigarettes (a public policy option that Bennett, a one-time heavy consumer of both substances, would no doubt oppose, despite the drugs’ heavy social toll). Nevertheless, Bennett’s premise is all but irrelevant to the marijuana legalization debate. Here’s why:

    Cannabis is safer than alcohol.

    Alcohol is toxic to healthy cells and organs, a side effect that results directly in about 35,000 deaths in the United States annually from illnesses such as cirrhosis of the liver, ulcers, cancer and heart disease. Heavy alcohol consumption can depress the central nervous system — inducing unconsciousness, coma and death — and is strongly associated with increased risks of injury. According to US Centers for Disease Control, alcohol plays a role in about 41,000 fatal accidents a year and in the commission of about one million violent crimes annually. Worldwide, the statistics are even grimmer. Stated a February 2011 World Health Organization report, alcohol consumption causes a staggering four percent of all deaths worldwide, more than AIDS, tuberculosis or violence.

    By contrast, the active compounds in marijuana, known as cannabinoids, are relatively nontoxic to humans. Unlike alcohol, marijuana is incapable of causing a fatal overdose, and its use is inversely associated with aggression and injury. According to a just-published review in the Journal of Psychopharmacology, “A direct comparison of alcohol and cannabis showed that alcohol was considered to be more than twice as harmful as cannabis to users, and five times more harmful as cannabis to others (society). … As there are few areas of harm that each drug can produce where cannabis scores are more [dangerous to health] than alcohol, we suggest that even if there were no legal impediment to cannabis use, it would be unlikely to be more harmful than alcohol.”

    Cannabis is far safer than tobacco.

    According to a 2009 white paper by the Canadian Center on Substance Abuse, health-related costs per user are eight times higher for drinkers than they are for those who use cannabis, and are more than 40 times higher for tobacco smokers. It states: “In terms of (health-related) costs per user: tobacco-related health costs are over $800 per user, alcohol-related health costs are much lower at $165 per user, and cannabis-related health costs are the lowest at $20 per user.”
    A previous analysis commissioned by the World Health Organization agreed, stating, “On existing patterns of use, cannabis poses a much less serious public health problem than is currently posed by alcohol and tobacco in Western societies.” So then why is the federal government so worried about adults consuming it in the privacy of their own homes?

    Some tax revenue is better than no tax revenue.

    According to a 2007 George Mason University study, U.S. citizens each year spend about $113 billion on marijuana. Under prohibition, all of this spending is directed toward an underground economy and goes untaxed. That means state and local governments are presently collecting zero dollars to offset any existing societal and health costs related to recreational marijuana use. Therefore, the imposition of any retail tax or excise fee would be an improvement over the current situation.

  • by Allen St. Pierre, NORML Executive Director March 8, 2012

    A relatively new webpage called Republic Reports (a project of United Republic with the sub moniker ‘Investigating How Money Corrupts Democracy‘) has turned much needed public attention to one of the five pillars of Pot Prohibition: The Law enforcement community’s role in perpetuating another possible 74 years of Cannabis Prohibition laws in America.

    Local/state police, sheriffs, prosecutors and federal agents from the DEA claim, as they often do, that ‘they don’t make the laws, they only enforce them‘.

    Is this really true? Not according to Republic Report.

    By Lee Fang

    John Lovell is a lobbyist who makes a lot of money from making sure you can’t smoke a joint. That’s his job. He’s a lobbyist for the police unions in Sacramento, and he is a driving force behind grabbing Federal dollars to shut down the California marijuana industry. I’ll get to the evidence on this important story in a bit, but first, some context.

    At some point in the distant past, the war on drugs might have been popular. But not anymore — the polling is clear, but beyond that, the last three Presidents have used illegal drugs. So why do we still put hundreds of thousands of people in steel cages for pot-related offenses? Well, there are many reasons, but one of them is, of course, money in politics. Corruption. Whatever you want to call it, it’s why you can’t smoke a joint without committing a crime, though of course you can ingest any number of pills or drinks completely within the law.

    Some of the groups who want to keep the drug illegal are police unions that want more members to pay more dues. One of the primary sources for cash for more policing activities are Federal grants for penalizing illegal drug use, which help pay for overtime, additional police officers, and equipment for the force. That’s what Lovell does, he gets those grants. He also fights against democratic mechanisms to legalize drugs.

    In 2010, California considered Prop 19, a measure to legalize marijuana and tax it as alcohol. The proposition gained more votes than Meg Whitman, the former eBay executive and Republican gubernatorial nominee that year, but failed to pass. Opponents of the initiative ran ads, organized rallies, and spread conspiracy theories about billionaire George Soros to confuse voters.

    Read the rest here.

  • by Allen St. Pierre, NORML Executive Director February 27, 2012

    You can’t make this stuff up!

    I often say to staff, supporters and the media that: We’re blessed by our opponents to cannabis law reform!”

    A few weeks ago the New York Times featured a straight forward story during these recessionary times about local and state governments with legal protections for medical cannabis patients struggling to cobble together taxation and other revenue streams derived from medical cannabis in the face of federal recalcitrance and outright law enforcement opposition.

    The national affairs story is almost a no-brainer that wrote itself regarding this clear conflict between state and federal governments over the country’s festering 74-year old and increasingly unpopular Cannabis Prohibition.

    While not clear if whether or not an indication of the dearth of letters received by the NYT on the subject matter (i.e., meaning the subject matter was not controversial), or, the letters’ editors casting needed public light on the kind of remaining, almost teetering and naked public opposition that solidly supports another eight decades of the failed and expensive public policy of Cannabis Prohibition, the publishing of only these two letters, from such clearly bias sources, is potentially revealing.

    The first letter is from a drug rehabilitation center CEO in NYC (back in the late 1980s and throughout most of the 1990s, one of the most frequently published commentators and letter writers in the New York Times against virtually any pro-cannabis law reforms was Mitchell Rosenthal of Phoenix House, another drug rehabilitation provider like competitor Odyssey House. Not too surprisingly the current CEO of Odyssey House used to be employed at Phoenix House….).

    The second letter is from a decidedly unsurprising duo of longtime anti-cannabis propagandists and prohibition profiteers, former National Institute of Drug Abuse head Robert DuPont, M.D. (who, as director of NIDA, at one time publicly supported major cannabis law reforms, including decriminalization) and former Drug Enforcement Administration honcho Peter Bensinger.

    Both the former G-men and current pee testers, like rehabbers Rosenthal and Odyssey House CEO Peter Provet, are now some of the very few and clearly committed individuals remaining in a country with an estimated population in excess of 300 million to consistently write and publish letters to the editors of major newspapers and magazines condemning all things cannabis and favor not only the status quo, but a doubling-down by government passing even more stringent and invasive anti-cannabis laws and enforcement.

    While the NYT correctly identifies these two prohibitionists’ former executive roles in federal government anti-drug bureaucracies going back 30 years ago, what the NYT failed to inform readers is that DuPont and Bensinger are the longtime and current principles of a lucrative drug testing (their company has been chosen by members of Congress to perform individual drug tests) and anti-drug counseling business to Fortune 1000 companies and small businesses.

    As previously stated, currently in America, almost all of the public opposition against cannabis law reform historically comes from government agencies, industries and companies who most financially benefit from the current and failed status quo of Cannabis Prohibition:

    –>Law Enforcement Agencies: Employees from local police to the Drug Enforcement Administration, to sheriffs, prosecutors, probation officers and prison guards, in modern times are usually the first in line, loudest and most strident against ending Cannabis Prohibition in America.

    –>Government Bureaucracies Born of Cannabis Prohibition: DEA, ONDCP, FBI, NIDA, SAMHSA, DARE, PDFA, etc…

    –>Industries and Companies That Will Compete With Legal Cannabis: Tobacco, Alcohol, Pharmaceutical, Wood and Fuel

    –>Industries and Companies That Currently Benefit From Cannabis Prohibition Laws: Private Prisons, Drug Testing, Drug Rehab, Drug Detection Device Makers, Mercenary Private Military Companies That Perform Duties and Actions Once Reserved for the Civilian Military

    The below letters published by the NYT demonstrate how limited, parochial and self-interested today’s anti-cannabis activists are becoming in a country where 50% of the public no longer supports Cannabis Prohibition.

     Letters

    Taxing Medical Marijuana

    Published: February 23, 2012

    To the Editor:

    Struggling Cities Turn to a Crop for Cash” (news article, Feb. 12) doesn’t mention a major issue of concern that has to be considered before claims of attractive financial benefits from taxing medical marijuana can be made.

    In the states mentioned — California, Colorado, Maine and Oregon — 3.2 million people are not receiving the treatment services they need for drug abuse and dependence. California alone accounts for 2.3 million people with untreated substance abuse disorders.

    Before hard-pressed municipalities, in these and other states around the country, look at medical marijuana as a new source of tax revenue to finance essential services, taxpayers should be given the opportunity to consider allocating some of this money to under-supported treatment and prevention programs.

    This will not mitigate the effects of untreated substance abuse, but it will help send a clear message to young people that marijuana, prescribed or not, has addictive potential that too often requires intensive treatment.

    PETER PROVET
    President and Chief Executive
    Odyssey House
    New York, Feb. 13, 2012

     

    ______________________________

     

    To the Editor:

    California cities’ meager tax payments are a tiny fraction of the costs of their misguided “medical marijuana” initiatives.

    The taxes imposed on medical marijuana place it in a category with alcohol and tobacco, two legal drugs that demonstrate the same appalling disparity between tax revenues and societal costs. The state and federal alcohol revenue of $14 billion and the $25 billion collected in tobacco taxes in the United States are overshadowed by the $235 billion and $200 billion in social costs they produce, respectively.

    Among all Americans 12 and older who abuse or are dependent on an illegal drug, 60 percent abuse or are dependent on marijuana. Nationally, admissions for primary marijuana use to state-financed treatment have increased by 31 percent from 1998 to 2008 (the most recent year for which data are available).

    California and other states that have legalized medical marijuana face the disturbing reality of the drug’s true costs in long-term health care, increased treatment admissions, loss of productivity at work and at school, and increased risk of motor vehicle crashes.

    In addition to the disproportion of small tax revenue compared with large societal costs, medical marijuana sharply increases marijuana use and dependency. With 60 percent more cancer-causing chemicals than cigarettes and four times more tar, making marijuana more available is bad economic policy and bad health care policy.

    PETER B. BENSINGER
    ROBERT L. DuPONT
    Chicago, Feb. 14, 2012

    The writers are, respectively, former administrator of the Drug Enforcement Administration, 1976-81; and a psychiatrist and founding director of the National Institute on Drug Abuse, 1973-78.

  • by Allen St. Pierre, NORML Executive Director February 18, 2012

    By Kellen Russoniello, George Washington University Law student and NORML Legal Intern

    The recent push for implementing drug testing for potential welfare recipients across several states has revealed at least two things: 1. The policy is not economically sound; and 2. It really brings out the hypocrisy in some elected officials.

    Last summer, Florida implemented a law requiring all welfare applicants to submit to a mandatory drug test before receiving any benefits (Applicants had to pay the $30 for the test themselves, only to be reimbursed later if they passed. For more information, see this NORML blog post.). Not surprisingly, the program was brought to a quick halt. Back in October of 2011, a federal judge ruled that the Florida drug testing law was unconstitutional.

    Further, in the few months that the program was up and running, it was shown that only 2% of welfare applicants tested positive for drugs. About 9% of the general population reports using drugs in the past month. So much for Governor Rick Scott’s theory that the poor use drugs more often than the rest of the populace.

    Even more striking is the amount of money that Florida lost from this poorly designed policy. The Tampa Bay Online estimated that $3,400 to $8,200 in savings would be recognized every month from drug testing welfare applicants. As it turns out, the program is estimated to have cost Florida over $200,000. From any perspective, this policy can be regarded as a failure.

    Despite the lessons that can be learned from Florida’s debacle, several states are still considering implementing programs to subject their impoverished population to drug tests. The Huffington Post reported that twelve states attempted passing legislation in 2011 that would require drug tests for welfare applicants. Florida, Missouri, and Arizona were the only three that succeeded. However, Pennsylvania has just begun a pilot program in Schuylkill County that subjects certain applicants to drug tests. By tailoring their laws to apply only to applicants that have aroused reasonable suspicion, these states are hoping to avoid constitutional problems like those that ultimately invalidated the Florida law and a similar Michigan law in 2000 (which was affirmed in 2003). Several states have also tried to drug test those who seek unemployment benefits, state employees, and private sector employees, including the passage of an Indiana law that requires drug testing for those in a state job-training program.

    When pressed, legislators that support this policy try to justify their position by claiming that the taxpayers should not subsidize drug addiction. But taxpayers pay for much more than just welfare. Some of their money goes towards paying their legislators’ salaries. Wouldn’t this same rationale justify drug testing legislators? This has been the tactic of many Democratic state legislators to thwart Republican efforts to test welfare applicants. In fact, a Republican State representative in the Indiana General Assembly recently pulled a bill after another representative amended it to include drug testing for legislators. The bill was reintroduced and passed by the Indiana General Assembly the following week, which included a section requiring legislators to submit to random drug tests. Missouri and Tennessee currently have bills that would require legislators to submit to drug tests. These were introduced in reaction to a slew of bills aimed at requiring drug tests on different areas of the population. It seems that the legislators who want to drug test the poor aren’t really convinced of the merits of the program when applied to themselves.

    Hopefully, state politicians will come to their senses as knowledge about the failure of Florida’s policy becomes more well-known. But given this country’s track record on drug policy, I wouldn’t recommend holding your breath.

    To see a hilarious summary of Florida’s drug-test-the-poor policy, watch this Daily Show clip, which includes Florida State Representative Scott Plakon’s and Governor Rick Scott’s reactions to being asked to take a drug test.

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