Llad Phillips 1 Casual Users, Substance Abusers, and Public Policy The War On Drugs

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4 Questions u Should public policy towards marijuana be any different than public policy towards alcohol consumption and cigarette consumption? –Why?

Llad Phillips 5 Questions u The US has suffered three drug abuse epidemics. Why are we so vulnerable? u Is drug abuse a victimless crime? u Is marijuana the number one drug problem in the US?

Llad Phillips 6 Outline u US Drug Problems –1970’s: heroin –1980’s: cocaine –2000’s: meth u Fear, Aids, and Drug Policy u Drugs and Crime u Policy Towards Marijuana

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10 Death Rates from HIV

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12 Drugs and Crime: The Perception of the Victim Source:

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15 Arrests: The War on Drugs

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18 State Prisoners Federal Prisons: In 1996, Drug Offenders accounted for 60% of accounted for 60% of Federal Prisoners Federal Spending on Drug Control 1981$1.5 Billion 1989$6.7 “ 1990$9.8 “ 1995$13.0 “ 2000$17.9 “ 2001$18.1”

Llad Phillips 19 Federal Drug Budget By Function  Total $17,940.3 $18,053.1  Drug treatment $2,915.2 $3,168.3  Drug prevention 2, ,515.7  Criminal justice system 8, ,357.7  International 1,  Interdiction 1, ,950.4  Research  Intelligence  International (U.S. Support  for Plan Colombia 954.4

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23 Drug Use by High School Seniors ER Incidents

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27 Questions About Crime u What are the Social Policy Options Towards Victimless Crimes? –education problem F prevention –health problem F cure for addicts and abusers –fiscal problem F control use through taxes –law enforcement problem F focus on demand? –users F focus on supply? –distributors

Llad Phillips 28 Education u Let an informed public make a choice –An individual would weigh the benefits against the costs –If the benefit/cost ratio exceeds one F smoke F drink –Could impose costs on others F driving under the influence F second hand smoke –Protection of Minors F blandishments of advertising F influence of peers

Llad Phillips 29 Health u Treat substance abuse –Need to identify the abusers F many citizens are not covered under health plans –Difficult to cure addicts

Llad Phillips 30 Fiscal Policy u Use excise taxes, a tax per unit, to control demand –tax per pack of cigarettes –tax per bottle of gin u Policy moderates rather than eliminates use –lacks the moral suasion of a law prohibiting use

Llad Phillips 31 Law Enforcement u Control demand? –hard to keep tabs on numerous users –loss of respect for the law F people like to party u Control supply? –at home F search and destroy policies have a low success rate –abroad F interdiction of supply has low success rate F we export our enforcement problem to: –producing countries, e.g. Bolivia –transhipment countries, e.g. Mexico

Llad Phillips 32 What are the Tradeoffs Among Policy Options?

Llad Phillips 33 Some Consequences from Criminalizing Substance Use u barrier to law-abiding suppliers u enriches crooks –prohibition financed the Mafia in the US –drug profits have created a new Mafia in Colombia u high prices drive some users to crime to support their habit u easy money corrupts some law enforcement officials

Llad Phillips 34 “Scale, nature, and perception of the drug problem are very different in...” u United States u Canada u Western Europe Source: Peter Reuter et. al., Comparing Western Europe and North American Drug Policies, Rand

Llad Phillips 35 The Western Nations Drug Problem

BehaviorSocial Problem drug use crime AIDS ( violence: US with guns, 50 million hanguns in private hands = 100 times the per capita rate in Europe) (free needles for addicts: Germany Italy Netherlands Switzerland Great Britain)

Llad Phillips 38 CountryNumber of Heroin AddictsEpidemic Decades US600, ,00060’s & 70’s Great Britain60’s Germany60’s Netherlands60’s Spain80’s CanadaNone CountryNumber of Cocaine AddictsEpidemic Decades US1,800,000-2,000,000*80’s CanadaNone * 12,000,000 users of at least once per year

Llad Phillips 39 The Western Nations Drug Problem

Llad Phillips 41 Market Analysis u Compare and contrast –free market –enforcement –fiscal policy F excise tax as a control device

Llad Phillips 42 Market Analysis u concepts –market supply F marginal cost of production: the additional cost of one more unit F cost of production equals the sum of marginal costs F revenue = price * quantity sold –market demand F price some consumers are willing to pay F expenditure = price * quantity bought F consumer surplus: a measure of welfare for those consumers willing to pay above the market price

Llad Phillips 43 Market Analysis u Concepts –supply and demand F determines the market price –the marginal cost of production = the marginal value of consumers F the quantity demanded equals the quantity supplied F profit = revenue - cost of production –profit, or producer’s surplus, is a welfare measure F total welfare benefit = consumer’s surplus + producer’s surplus

Market Supply

Market Demand

Market Supply and Demand

Enforcement Policy: Search, Confiscate, Resale

Enforcement Policy: Search, Confiscate, Burn

Fiscal Policy: 50% Excise Tax, Government Keeps the Revenue

Fiscal Policy: 50% Excise Tax, Government Keeps Revenue

Fiscal Policy: 50% ExciseTax, Use Revenue to Buy Marijuana