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The impact of drug legalization on the economy Grade (Feb. 12th, Table of Contents The impact of drug legalization on the economy...………………………………………………3 Introduction………………………………………………………………………………………3 Discussion...………………………………………………………………………………………3 Positive impacts of drug legalization…..…………………………………………………………4 Revenue increment...……………………………………………………………………………..4 Saving on the costs, time and manpower….……………………………….……………….……4 New jobs creation and revitalization of the agricultural sector…….…………………………….5 Negative impacts…………………………………………………………………………………6 Increased medical costs……………………….…………….……………………………………6 Low job productivity……..………………………………………………………………………6 Works Cited………………………………………………………………………………………8 The impact of drug legalization on the economy Introduction The topic regarding the legalization of drugs, and notably the soft drugs such as marijuana has gained momentum of late, with different quarters holding the opinion that the legalization of such drugs would do good than harm to the society and to the economy. The proponents of this position holds that it is time the government established a system of making such drugs legal, and thus put down the burden of soft drugs control. This way, the budget committee to the control of soft drugs can be rechanneled to other essential social service provision (Morgan, 12). However, the opponents of this position hold that the legalization of drugs is tantamount to paving way for social and moral fabric degradation. In addition, those opposed to the legalization recognize the chances of increment of health problems that will arise out of the increased consumption of the drugs, once they are legalized (Evans and Berent, 142). The both of these arguments are relevant, when the socio-economic sense of legalizing the soft drugs is to be established. However, the merit of this side of the argument can only be arrived at, after a careful consideration of all the factors in play in the process of legalization of drugs, which have previously been considered illegal. Will the social, ethical and moral perspective towards the drugs change once they are legalized? Are there chances that more people who have not been consuming these drugs will start using them now that they have become legalized? Are the economic gains derived from the legalization of the drugs sufficient to cover for the possible negative effects and still benefit the society? Thus, this discussion seeks to assess the impact of drug legalization on the economy, with a view to establishing which side of the argument holds solid ground. Discussion Positive impacts of drug legalization Revenue increment The major positive impact of drug legalization is that it will add to the sources of revenues for the economy, and thus will play an important role in promoting the growth of the economy. Once the drugs have been legalized, what will follow is the process of tapping the drug trade into the revenue taxation system (Miron, n.p.). Close observers have held that the legalization of Marijuana alone throughout the United States has the impact of generating between 2.2 billion to 6 billion dollars annually in taxes alone, after the application of a ‘harmful tax’ of between $.50 -$1 per each joint of the drug sold over the counter (Gieringer, 312). This simply means that the government can be able to meet some other social needs that it cannot meet currently, through using the generated tax revenues to solve other social amenities issues that need financing. Consequently, the proponents of drug legalization hold that it is now time that the society and the government considered the likely benefits arising from the possible legalization of drugs, and thus walk towards that route. Saving on the costs, time and manpower The legalization of drugs has been perceived as a way though which the economy can save on the time, manpower and the costs that are consumed up in drug control measures (Chaloupka, 134). The argument for this reasoning being that; once the drugs have been legalized, there will no longer be a need for various drug control agencies and law enforcement departments that focuses on drug control. The inclusion of the soft drugs such as Marijuana in the government legal control system such as that of alcohol will save the economy approximately $7.7 applied by the government in the prohibition expenditures annually (Miron, n.p.). It is currently estimated that the spending at both levels of government in the prohibition regulation for the soft drugs is approximately $2.4 billion for the federal government, while a total of $5.3 billion is spent for the prohibition control at the state level. Consequently, should the government decide on legalizing such drugs, the impact would be a huge revenue savings that can then be channeled back to solving other social problems affecting the society. This is most important considering the fact that the total revenues resulting from both the savings on the prohibition expenditure, and new revenues generated from the legal taxation of the drugs, will amount to a total of between $10 billion and $16 billion annually (Miron, n.p.). New jobs creation and revitalization of the agricultural sector The legalization of drugs has been taunted as one of the ways of reviving the economic performance of the country, through the creation of new employment opportunities for the young people (Gieringer, 317). Once the drugs are legalized, there will be numerous opportunities for the young people in the country to venture into different aspects of the production and supply chain of the drugs, which will in turn create new employment opportunities. The effect is that the unemployment rate in the country will be lowered considerably, while the disposable incomes and the purchasing power of the young people who are currently unemployed will increase (Morgan, 22). The overall effect of this change is that; the economy will be boost through increased spending. The other way through which the economy will benefit is through the revitalization of the agricultural sector. This is because, the production of the soft drugs will definitely increase once they have been legalized, since there will no longer be production being done underground or when concealed (Evans and Berent, 147). The effect is that the agricultural sector will be boost, which will in turn serve to boost the performance of the economy. While the agricultural sector is going to benefit, the health sector is also going to benefit. This is owing to the fact that the raw materials for the processing of different kinds of drugs and prescriptions will be easily acquired, once drug legalization is achieved due to increased production (Chaloupka, 136). This will also save some costs, and thus reduce the health burden on the economy. Negative impacts Increased medical costs The legalization of drugs will definitely mean that more people will be involved in their consumption. This is owing to the fact that their legalization will make them more accessible and affordable since they will be sold over the counter and also competitively in the open markets (Miron, n.p.). The effect is that a large population of the adults will be engaged in drug consumption, which means that it will results in more health problems than there is currently. The overall impact is that the government will be required to increase its spending in health sector for the purpose of drug related problems prevention and cure (Evans and Berent, 139). This simply means that the legalization of the drugs will take a toll on the economy, through increasing the spending on the health sector. Low job productivity The other negative impact of legalization of drugs on the economy is that; the legalization of drugs will simply mean that they will be more accessible and affordable for adult consumption (Gieringer, 317). This will impact negatively on the productivity of the workforce, since the consumption of drugs will mean that some of the workforce will be facing issues such as hangovers as well as the other known side effects of drugs such as general tiredness and sleepiness. Overall, the workforce is likely to become less productive, since the working population involved in drug consumption will be slower in their work, while others may not even be able to report to their work stations out of the drugs’ side effects. The general rate of absenteeism is also likely to increase due to developing health issues caused by the legalized drug consumption (Chaloupka, 151). Thus, the productivity of the workforce will be reduced, and equally the economy will not be productive to its full potential. Works Cited Chaloupka, Frank J. The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research. Chicago: University of Chicago Press, 1999. 134-156. Print. Evans, Rod L, and Irwin M. Berent. Drug Legalization: For and against. La Salle, Ill: Open Court, 1992. 139-148. Print. Gieringer, Dale. Economics of Cannabis Legalization. Hemp Today, 1994. 311-24. Print. Miron, Jeffrey. “Milton Friedman, 500+ Economists Call for Marijuana Regulation Debate”, 2015. Web. February 13, 2015. < http://www.prohibitioncosts.org/> Morgan, Kayla. Legalizing Marijuana. Edina, MN: ABDO Pub. Co, 2011. Print.