The Audacity of Dope
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The Audacity of Dope
Could legal marijuana save California’s economy?
By Jeff Segal
Posted Wednesday, February 11, 2009 - 10:36am
Olympic swimmer Michael Phelps has made marijuana a popular topic. He was photographed smoking from a bong, lost corporate sponsorships, and was suspended from the sport as a result. But celebrities aren't the only ones thinking about dope.
Some legislators in California have pot on their minds, too. That's because the government of the biggest economy in the United States is facing a massive budget deficit whose pain would be alleviated by decriminalizing marijuana.
California's current deficit stands at a whopping $15 billion and is expected to reach $42 billion next year. And the state run by Gov. Arnold Schwarzenegger has virtually run out of cash. It recently delayed $3.5 billion of payments to taxpayers and counties.
While nearly all U.S. states currently face budget shortfalls, California's deficit is more than one-third of its general fund. That's largely due to its dependence on income taxes, which slide during a recession. And the state can't easily borrow due to the government bond-market freeze. Moody's even warned it may downgrade the state's rating.
There's no easy fix to the problem, as any solution likely requires cutting benefits and social services—tough political choices for Schwarzenegger. But the state does have an abundant natural resource it may be able to draw on for help.
Marijuana is California's largest cash crop. It's valued at $14 billion annually, or nearly twice the value of the state's grape and vegetable crops combined, according to government statistics. Indeed, a recent report pegged marijuana as two-thirds of the economy of Mendocino County, a ganja hotbed north of San Francisco. That's not surprising—it costs $400 to grow a pound of pot that can sell for $6,000 on the street.
But the state doesn't receive any revenue from its cash cow. Instead, it spends billions of dollars enforcing laws pegged at shutting down the industry and inhibiting marijuana's adherents. Of course, there's a reason for that. Marijuana's social costs may include addiction and rehabilitation treatment and lost productivity. Yet these are minute compared with the extensive social costs of alcohol or tobacco.
Of course, just legalizing pot wouldn't automatically harvest revenues for the state. An organized system of regulating sales and collecting taxes would need implementing. And it's possible that general drug use could rise, though the debate that pot is a gateway drug to harder substances is inconclusive.
There's also the question of whether or not taxing marijuana would simply create a black market that would again skimp the state on taxes. The best corollaries here are cigarettes and alcohol. Rises in "sin taxes" on them have decreased consumption—a positive—but don't seem to have destabilized the legal market. Decriminalization could lead to some job losses in law enforcement, though the countervailing argument would see these forces put to work stopping harder crime.
So what are the numbers? A national legalization effort would save nearly $13 billion annually in enforcement costs and bring in $7 billion in yearly tax revenues, according to a study by Harvard University economist Jeffrey Miron. Since California represents 13 percent of the U.S. economy, those numbers suggest the state could save $1.7 billion in enforcement costs and nab up to $1 billion in revenues. That doesn't include any indirect revenues as, for example, rural farming communities grow or marijuana tourism, which has been lucrative for the Netherlands, takes off.
Put it all together, and California could potentially wipe some $3 billion off its budget deficit by letting its people puff and pay. That still leaves it with a gaping $39 billion hole to fill, so the state's problems go far beyond what a new cash crop can fix. But anything to help soothe the state's chronic fiscal pain—even if unpalatable to some—is worth considering.
Comments
In response to Hipduced and soulsister
I agree with you, enjoi017, there are a lot of people that already have their mind set and not willing to change them. I too have an open mind although I too have have my mind set but open to listening to other ideas. I have heard that pot helps in keeping an open mind but there is trend growing that pot helps to see past the smoke and mirrors of the hypsters that try to use unfounded scare tactics and BS to get people to think and believe their way. Its the same way with second hand smoke and Cigars and Pipe smokers which is vastly different then cigarettes.
legalize pot
Has anyone noticed that in Europe where drinking is not mystified like it is here in the US that they have a lower rate of alcoholism? The same stands true for smoking pot in Amsterdam. In the US we have made certain things such as marijuana (among other drugs) and alcohol more appealing by restricting them. Children think they are being cool by experimenting with these items at a young age because there is a mystery to them. The younger the children start using these substances, the more likely they are to have problems with the substances or try other drugs later in life. Why not take away the appeal and decrease the number of addicts in the next generation? Besides some very dangerous substances are perfectly legal in the US. We have generations of pill poppers and alcoholics and no one has restricted those items.
Pot in CA & America
Come on people, even my conservative mom thinks no one- especially Micheal Phelps- should go to jail for pot.
Many of our older family members have used it to help with chemotherapy and other ailments.
I see a lot of people on here
I see a lot of people on here just saying how pot is a gateway drug and it makes people like zombies and you cant hold a job. I have heard all this before when I smoked when I was in college. about 80% of the kids in college smoke occasionally or all the time. I personally smoked every day and I held a job for years while I went to school. I also went to school full time and got good grades and so did 90% of my other friend who smoked every day. the only reason i quit is because I needed a job after i graduated. After smoking every day i quit cold turkey and have never smoked since. i don't crave it or anything. I would never smoke and risk loosing my job. All of my other friends i have kept in touch with have done the same. All the people who sit there and talk about how bad it is are always the people who never smoked all the time. the first week or so of smoking does make you a zombie but after the first week your fully functional. as far as them making it legal It could be done they would just have to regulate the driving by making a limit and finding away to test it. How is smoking any different than drinking if its done in moderation. 98% of Americans illegally drive drunk at one point in time and take that risk im sure it would be the same with pot but the penalty would have be just as strict as dwi.
What he fails to mention in
What he fails to mention in the article are additional savings from a move like this:
According to a 2005 study 2/3s of the prison population in California are for NONVIOLENT drug offenses. This means no guns, no assault, no murder, just possession/possession with intent to sell etc. This does not account for the vast numbers of people in the parole system which, because of felony nonviolent drug charges are prohibted from being able to seek meaningful employment.
In 2005 there were 168,000 inmates incarcerated in the state of California. This equates to approximately 110550 people in CA that are imprisoned for nonviolent drug offenses.
The average cost (not counting health care/education/etc) for keeping a person in a California prison is in excess of $45k per year. This means that the CA state taxpayer pays $4,974,750,000, per year. Not counting recurring costs of maintaining these prisons, the payroll of all officials, and the bloated contracts that are tied into it. Not to mention the state welfare payments etc that are made. $5 Billion dollars, per year.
We most likely, given the above numbers could cut off btw 5 and 10 billion dollars from the state budget deficit. When we look at different surveys (which are of course incomplete and not 100% accurate) some 20% of adults in the United States smoke mj on a regular basis. If that were what it is in California (I would wager CA is a bit higher than the national average :P) we are looking at over 6 million adults that recreationally use the substance. If the state could get $500 per user per year thats $3 Billion dollars.
Then all of the infrastructure that goes into it and the non inhibriating uses for the plant and it could well cut the deficit in half, if not more.
and btw. No, I do not use any drugs, I am not high and have not been so for nearly a decade now. Though I have been a strong supporter of the legalization of this substance for over 20 years :)
Pot in America
I believe that it should be legalized through the United States, It would make money for all states and help with the budgets for all when they let out the people in jail for pot crimes, I use to like to smoke to help me sleep at night, my husband had to give it up because of drug testing at his jobs , now he is an alcoholic, because he had to change his drug of choice so that we would not lose everything if he failed a drug test. My husband is a better person when he is high compared to when he is drunk, he never got mean when he smoked and he was very creative and got a lot done , now that he is a drunk he does not get as creative and his mood swings are bad, he is a functioning alcoholic , I wish he could go back to pot he was a way better person. I quit smoking pot a long time ago because it was illegal and when we smoked we became paranoid about getting caught. It could so help the economy people that have lost there jobs could open up smoke shops , and the tax money ,and the easing on the justice system , and the change for the police it could be a very good thing for us. As stated in another post I have never seen anyone steal for pot,become violent while smoking pot and it I wish that my father would have tried it while he was dying from cancer but no he could not because it was illegal and he and my mother had that preconcieved notion that it would make him flip out.
drunkenness
cannabis prohibition is about as irrational and insane and, just plain drunken, as it would be to prohibit growing and consuming tomatoes, or corn, or any of the other common grace blessings that are provided for our sustenance. When an individual crop can potentially power our cars, build our houses, feed and clothe the poor, alleviate the suffering of cancer victims, arrest the development of glaucoma, and stop a full blown asthma attack; only a blind, irrational, and drunken fool would think to not use it. God Bless, Jeff Lucas
legalize it
What I haven't seen is an argument for the legalization of marijuana for its industrial usage as hemp. Hemp has so many uses that it alone would solve a good many financial problems of farmers, energy folks, oil folks etc. Of course, there is the old hackneyed thought that pot farmers will grow their plants amongst the hemp. Well, as a former farmer, I'll guarantee you that no pot farmer will grow their plants in hemp stands. Ask anybody conversant with genes and they'll tell you why not. Hemp seeds are nutritious, they have just about as much protein as peanuts. The fibers from the stalks can be used as biomass fuel, woven into clothes the list goes on and on. The polymers from hemp can be used to make car bodies (Henry Ford did this in 1938 for Christ sakes, why don't we do it now?). Oh, and if one were to smoke hemp, the buzz would be more like smoke inhalation as there is less THC in hemp then there is alcohol in near beer. Also, who the hell is the government, who subsidizes the booze industry, to tell anybody they can't smoke pot?
California the next Amsterdam?
Has not anyone checked up on the most tolerant city in Europe lately? Amsterdam with it's very unhyprocritical tolerances of marijuana and other drugs has attracted violence and prostitution openly on the streets. And those of you who write give only the responsible side of the coin. You use it for your health or only once a day in place of a cigarette or glass of wine. But, you are not the mass of the population and obviously not the poor, depressed or teen wanting to do something a little off the wall. Marijuana leads most people to harder drug addictions, or for those who don't like to deal with the hardships of real life the possibility of being in a continuous stupor of tranquility. Add in prostitution and higher crime and you have one f#$%#d up state. Yes, marijuana smokers are mellow and unviolent but they also cannot hold a job with rose colored glasses on. There's enough people on welfare now, we don't need a whole entire state devoted to it. You argue that you can get pot already for your health and that you can grow it in your garden. You are not being oppressed. But to allow those who are less strong in their ability to use moral and ethical restraint to become possible victims of harder substances is not moral or ethical of you. If you drink or smoke in front of your children their risk of doing the same is greater than those who don't see it. Your right, there will always be pot smokers in homes, backrooms, and hidden away places. But this scenario has lead to medicinal purpose marijuana. If you get an inch don't take a mile. And until your ready to secede from the US don't get into such a frenzy. Most of the country does not agree with you and with California in the mess that its in, and looking for a bailout, some hope it would go away for awhile.
California the next Amsterdam?
Yes people has checked and even though it does tolerate soft drugs and prostitution the crime rate is very low compared to USA per person and there is a state in USA that allows prostitution as well, not that is not prostitution in about every state already. Marijuana leads to other drugs is a scare tactic to keep it from being legalized. Just because some might have a problem is no reason not to legalize it alcohol is legal and the number that has a problem from that is humongous . Sorry to pick on you but I think you are looking through some colored glasses there are pot smokers in a lot of different walks of life in low paying to high paying jobs that, except for loss of job to drug test,are able to keep them. Actually more don't care then the ones for and against it combine. Its not the evil they are trying to say it is and before Reagan took office and Nancy started the "Just say no' campaign there was 10 states that de-criminalized it. Did you know that the reason it was made illegal in the first place was because of the migrant farm workers from south of the boarder?