Casual Users, Substance Abusers, and Public Policy

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

2. Questions • Should public policy towards marijuana be any different than public policy towards alcohol consumption and cigarette consumption? • Why?

3. Drugs and Crime: The Perception of the Victim Source: http://www.ojp.usdoj.gov/bjs/

6. Arrests: The War on Drugs

9. State Prisoners Federal Prisons: In 1996, Drug Offenders 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”

10. Federal Drug Budget By Function • Total $17,940.3 $18,053.1 • Drug treatment $2,915.2 $3,168.3 • Drug prevention 2,338.6 2,515.7 • Criminal justice system 8,429.0 9,357.7 • International 1,892.9 609.7 • Interdiction 1,965.9 1,950.4 • Research 89.6 106.1 • Intelligence 309.1 345.2 • International (U.S. Support • for Plan Colombia 954.4

14. Drug Use by High School Seniors ER Incidents

16. http://www.cdc.gov/hiv/graphics.htm

17. Death Rates from HIV

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

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

23. Health • Treat substance abuse • Need to identify the abusers • many citizens are not covered under health plans • Difficult to cure addicts

24. Fiscal Policy • Use excise taxes, a tax per unit, to control demand • tax per pack of cigarettes • tax per bottle of gin • Policy moderates rather than eliminates use • lacks the moral suasion of a law prohibiting use

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

26. What are the Tradeoffs Among Policy Options?

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

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

29. The Western Nations Drug Problem

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

32. Country Number of Heroin Addicts Epidemic Decades US 600,000 - 800,000 60’s & 70’s Great Britain 60’s Germany 60’s Netherlands 60’s Spain 80’s Canada None Country Number of Cocaine Addicts Epidemic Decades US 1,800,000-2,000,000* 80’s Canada None * 12,000,000 users of at least once per year

33. The Western Nations Drug Problem

35. Market Analysis • Compare and contrast • free market • enforcement • fiscal policy • excise tax as a control device

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

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

38. Market Supply

39. Market Demand

40. Market Supply and Demand

41. Enforcement Policy: Search, Confiscate, Resale

42. Enforcement Policy: Search, Confiscate, Resale

43. Enforcement Policy: Search, Confiscate, Burn

44. Enforcement Policy: Search, Confiscate, Burn

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

46. Fiscal Policy: 50% Excise Tax, Government Keeps Revenue

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