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The United States Government is looking for tactics to cut expenditure or increase revenue. There is a controversial discussion about legalization of mind-altering drugs such as marijuana and cocaine. I found a monograph by a lecturer in economics at Harvard, Jeffrey Miron, which provides some statistics regarding this proposal.

There is an estimate of $41.3 billion reduction of government expenditure every year by legalizing the illegal mind-altering drugs. The savings would come from the reduction of law enforcement expenditure, judicial, prison and jail expenditure. Furthermore, legalizing the illegal drugs would arguably increase the federal and state tax revenues. He estimates the increase to be about $ 46.7 billion a year. There is also additional revenue from the income tax paid by the drug sellers.

Although I think there are some moral and ethical hazards regarding this legalization, there is potentially substantial revenue gain from it for the government and subsequently the whole society. I am not denying that there is a considerable social benefit of prohibition of mind-altering drugs. However, I think we can use the same arguments that were used 1933 for legalizing alcohol consumption. Moreover, the tax on these drugs would raise their price; therefore the consumption would be automatically moderated.