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February 12, 2009

Save The Economy – Legalize Drugs

Torrents of cash gush destructively through the underground economy. Liquidity is never a problem there, just violence. Piles of money are diverted from the real economy to fight the failed war on drugs. Our neighbors to the south are getting tired of paying a bloody price for our drug efforts. Our efforts in Afghanistan are undermined by the money in opium.

It's time that we end prohibition and legalize drug sales to adults. We can and should have draconian penalties for selling drugs to children but it's easier to protect minors against a legal substance than an illegal one since the legal distribution chain is out in the open and has something to lose if caught acting illegally.

It's hard to quantify the economic stimulus that would come from surfacing the drug trade; at the very least it would be a major new source of tax revenue to struggling states and greatly reduce the cost of keeping drug users – including those who commit other crimes to feed their expensive habits - and small time dealers in jail. Huge amounts of police manpower go to attempting to solve drug related crimes.

A story in today's Wall Street Journal by Jose De Cordoba reports that a commission led by three conservative Latin American former presidents - Fernando Henrique Cardoso of Brazil, Ernesto Zedillo of Mexico, and César Gaviria of Colombia "blasted the U.S.-led drug war as a failure that is pushing Latin American societies to the breaking point."

"The report warned that the U.S.-style antidrug strategy was putting the region's fragile democratic institutions at risk and corrupting "judicial systems, governments, the political system and especially the police forces.""

It's surprising that Latin American societies have put up with the cost to them of our war on drugs for as long as they have.

So legalizing drugs is a stimulus package (pun intended) that comes at a negative cost to the taxpayer, punishes the bad guys by ruining their business, creates new business opportunities for good guys and lets us treat drug problems as we do alcohol and other addictions. The only problem is that it's political dynamite and will cause a huge anti-Obama surge from the right (but not from real conservatives like me).

Probably more change than it's realistic to believe in but much better economic policy than bailing out banks or shoveling pork. And good social and foreign policy as well.

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