High Crimes and Misdemeanors

A recent article on Slate magazine, ‘The Audacity of Dope’, was wondering aloud a couple of things, which, when tied together, could be the salvation of the State of California. This would be a very good thing, since the state is facing a deficit that is befitting the world’s 7th largest economy.

Can you spell NORML?

Just last night, another failed attempt to pass a budget in the state assembly has the Governator worked up, and the Republicans doing the stupid things that their brethren in Congress do. The difference is that the individual states must have a balanced budget, and can not simply put it off to be paid by future budget resolutions.

Now the Slate article comes in the wake of the furor over the Michael Phelps bong incident. This has brought many to wonder why the ostensibly largest cash crop in California should not be able to ‘come out of the closet’ and thereby become a legal drug, which can be regulated, and more importantly, taxed.

Beyond the fact that many will be amazed by the fact that the approximate monetary figures are available, and where all of this agriculture is taking place, some will again ask when the hypocrisy will end.

The Libertarian in me wants all drugs to be decriminalized, if not completely made legal. Spare me the rhetoric, it is about common sense. Putting the ‘war of drugs’ into the ashcan of history is one of the smartest things this country could ever do.

A new meaning for the term Victory garden

By taking away the ‘war’, those charged with fighting it can be retasked to fight real crimes; and yes, some of them will be committed by those on drugs, but it will be far easier to take care of that small number, and worry less about the drugs coming in through the borders. This has been a talking point since the ’60s, but I’m not certain that anyone took it seriously enough to crunch the numbers (after all, it was harder back then - you either had to be good with pencil and paper or an abacus!)

from Slate

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.

I don’t know if it is still done, but I know where decent sized crops were grown in Riverside Country, not far from where I graduated from high school. It was quite funny actually, as most under the age of 25 knew about it, and most over the age of 25, including law enforcement officials, didn’t (or at least pretended not to).

Imagine seeing fields of this, out in the open. Not only is it a nice looking plant, it would mean a balanced budget! There are quite a few medicinal uses, too - this pic came from a BBC article about those uses.

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.

I see it as more than just fiscally right, but it might be that those otherwise against in principle will deign to realize its pragmatic points.

(BTW, I have no involvement with this, or any drugs, for that matter. Unlike our 43rd President, I have inhaled, but it did nothing other than give me a sore throat,and that was many, many years ago. My reasons for legalization are purely on principle. Now if there are any true Republicans left, they should also be onboard)

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Quote of the Day:

Virtue has never been as respectable as money.
–Mark Twain, 19th-century American humorist, author and journalist