Economics of Drug Policy and the Drug War
- Federal Drug Control Spending by Function FY2013 through FY2017
- Estimated Federal Drug Control Spending By Function for Fiscal Years 2003-2017
Page last updated June 6, 2020 by Doug McVay, Editor/Senior Policy Analyst.
6. Estimated Savings and Added Revenue from Drug Legalization
"This report estimates that legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. Of these savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government. Approximately $8.7 billion of the savings would result from legalization of marijuana and $32.6 billion from legalization of other drugs.
Miron, Jeffey A., and Waldock, Katherine, "The Budgetary Impact of Ending Drug Prohibition," The Cato Institute (Washington, DC: Cato Institute, 2010).
7. Inherent Limitations of Drug Production and Consumption Estimates
"Existing estimates about drug production and consumption are cryptic, inconsistent, and often impossible to verify. Apart from the series of studies titled What America’s Users Spend on Illegal Drugs that was produced in the 1990s under ONDCP’s auspices (see Rhodes, 1995, and Abt Associates, 2001) and the 1990s work of the Drug Availability Steering Committee (2002), many of the most-quoted estimates are not documented in a manner that allows others to assess their credibility, let alone replicate them. The large year-to-year changes in official estimates of consumption and particularly of production reduce their credibility, given the stable data on marijuana use in the U.S. population over the past decade.
Kilmer, Beau; Caulkins, Jonathan P.; Bond, Brittany M.; and Reuter, Peter H., "Reducing Drug Trafficking Revenues and Violence in Mexico: Would Legalizing Marijuana in California Help?" International Programs and Drug Policy Research Center (Santa Monica, CA: RAND Corporation, October 2010), p. 44.
8. Estimated Combined Spending by Federal and State Governments to Address Substance Use
"Federal and state governments spent $3.3 trillion in 2005 to operate government and provide public services such as education, health care, income assistance, child welfare, mental health, law enforcement and justice services, transportation and highway safety. Hidden in this spending was a stunning $373.9 billion--11.2 percent--that was spent on tobacco, alcohol and other drug abuse and addiction. A conservative estimate of local government spending on substance abuse and addiction in 2005 is $93.8 billion.
"The vast majority of federal and state substance related spending--95.6 percent or $357.4 billion--went to carry the burden to government programs of our failure to prevent and treat the problem while only 1.9 percent was spent on preventing or treating addiction. Another 0.4 percent was spent on research and the remaining two percent was spent on alcohol and tobacco tax collection, regulation and operation of state liquor stores (1.4 percent) federal drug interdiction (0.7 percent). For every dollar the federal and state governments spent on prevention and treatment, they spent $59.83 shoveling up the consequences.
"A staggering 71.1 percent of total federal and state spending on the burden of addiction is in two areas: health and justice. Almost three fifths (58.0 percent) of federal and state spending on the burden of substance abuse and addiction (74.1 percent of the federal burden) is in the area of health care where untreated addiction causes or contributes to over 70 other diseases requiring hospitalization. The second largest area of substance-related federal and state burden spending is the justice system (13.1 percent)."
National Center on Addiction and Substance Abuse at Columbia University, "Shoveling Up II: The Impact of Substance Abuse on State Budgets" (New York, NY: CASA, May 2009), pp. 1-2.
9. Alcohol and Tobacco Use are Responsible for Most Substance-Related Spending by Federal and State Governments
"Almost half (47.3 percent) of government spending on substance abuse and addiction cannot be disaggregated by substance. In fact, research shows that most individuals who abuse or are dependent on addictive substances use more than one drug.9 Of the $248 billion in substance-related spending that can be linked to specific drugs of abuse, 92.3 percent is linked to the legal drugs of alcohol and tobacco."
National Center on Addiction and Substance Abuse at Columbia University, "Shoveling Up II: The Impact of Substance Abuse on State Budgets" (New York, NY: CASA, May 2009), p. 16.
10. Total State and Federal Government Spending on Drugs Other Than Alcohol or Tobacco in 2005
"Total government spending as a consequence of other drug use that can be differentiated by substance is an estimated $18.7 billion:
National Center on Addiction and Substance Abuse at Columbia University, "Shoveling Up II: The Impact of Substance Abuse on State Budgets" (New York, NY: CASA, May 2009), p. 17.