Pot Legalization Could Save U.S. $13.7 Billion Per Year, 300 Economists Say
Your plans to celebrate 4/20 this Friday could actually make the government some money, if only such activities were legal. That’s according to a bunch of economists, and some prominent ones too.
More than 300 economists, including three nobel laureates, have signed a petition calling attention to the findings of a paper by Harvard economist Jeffrey Miron, which suggests that if the government legalized marijuana it would save $7.7 billion annually by not having to enforce the current prohibition on the drug. The report added that legalization would save an additional $6 billion per year if the government taxed marijuana at rates similar to alcohol and tobacco.
That’s as much as $13.7 billion per year, but it’s still minimal when compared to the federal deficit, which hit $1.5 trillion last year, according to the Congressional Budget Office.
While the economists don’t directly call for pot legalization, the petition asks advocates on both sides to engage in an “open and honest debate” about the benefits of pot prohibition.
“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,” the petition states.
The economic benefits of pushing pot into mainstream commerce have long been cited as a reason to make the drug legal, and the economists’ petition comes as government officials at both the federal and local levels are looking for ways to raise funds. The majority of Americans say they prefer cutting programs to increasing taxes as a way to deal with the nation’s budget deficit — marijuana legalization would seemingly give the government money without doing either.
Officials in one state have already made the economic argument for pot legalization, but to no avail. California Democratic State Assemblyman Tom Ammiano proposed legislation in 2009 to legalize marijuana in California, arguing that it would yield billions of dollars in tax revenue for a state in dire need of funds. California voters ultimately knocked down a referendum to legalize marijuana in 2010.
Economist Stephen Easton wrote in Businessweek that the financial benefits of pot legalization may be even bigger than Miron’s findings estimate. Based on the amount of money he thinks it would take to produce and market legal marijuana, combined with an estimate of marijuana consumers, Eatson guesses that legalizing the drug could bring in $45 to $100 billion per year. Easton’s name doesn’t appear on the petition.
Some argue that the economic argument for pot legalization is already proven by the benefits states and cities have reaped from making medical marijuana legal. Advocates for Colorado’s medical marijuana industry argue that legalization has helped to jumpstart a stalled economy in cities like Boulder and Denver, according to nj.com.