Economists say U.S. could save $7.7 billion by ending marijuana prohibition

… and gain an additional $2.4 billion to $6.2 billion if they taxed it. That’s a budget swing of close to $14 billion a year at a time when we’re broke.
The Budgetary Implications of Marijuana Prohibition, by Boston University professor of economics Jeffrey A. Miron (June 2005)
Check out the long list of economists who have endorsed this letter:

An Open Letter to the President, Congress, Governors, and State Legislatures

We, the undersigned, call your attention to the attached report by Professor Jeffrey A. Miron, The Budgetary Implications of Marijuana Prohibition. The report shows that marijuana legalization — replacing prohibition with a system of taxation and regulation — would save $7.7 billion per year in state and federal expenditures on prohibition enforcement and produce tax revenues of at least $2.4 billion annually if marijuana were taxed like most consumer goods. If, however, marijuana were taxed similarly to alcohol or tobacco, it might generate as much as $6.2 billion annually.

The fact that marijuana prohibition has these budgetary impacts does not by itself mean prohibition is bad policy. Existing evidence, however, suggests prohibition has minimal benefits and may itself cause substantial harm.

We therefore urge the country to commence an open and honest debate about marijuana prohibition. We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods. At a minimum, this debate will force advocates of current policy to show that prohibition has benefits sufficient to justify the cost to taxpayers, foregone tax revenues, and numerous ancillary consequences that result from marijuana prohibition.

Update: Forbes has the story this morning.

MILTON FRIEDMAN: LEGALIZE IT!

SAN FRANCISCO, CA – A founding father of the Reagan Revolution has put his John Hancock on a pro-pot report.

Milton Friedman leads a list of more than 500 economists from around the U.S. who today will publicly endorse a Harvard University economist’s report on the costs of marijuana prohibition and the potential revenue gains from the U.S. government instead legalizing it and taxing its sale. […]

At 92, Friedman is revered as one of the great champions of free-market capitalism during the years of U.S. rivalry with Communism. He is also passionate about the need to legalize marijuana, among other drugs, for both financial and moral reasons.

“There is no logical basis for the prohibition of marijuana,” the economist says, “$7.7 billion is a lot of money, but that is one of the lesser evils. Our failure to successfully enforce these laws is responsible for the deaths of thousands of people in Colombia. I haven’t even included the harm to young people. It’s absolutely disgraceful to think of picking up a 22-year-old for smoking pot. More disgraceful is the denial of marijuana for medical purposes.” […]

“I’ve long been in favor of legalizing all drugs,” he says, but not because of the standard libertarian arguments for unrestricted personal freedom. “Look at the factual consequences: The harm done and the corruption created by these laws…the costs are one of the lesser evils.”

Nice. When you get people of the stature of Milton Friedman talking about legalization in Forbes… Well then maybe a few more people will sit up and realize “Hey, this isn’t just about some stoned hippies — there appears to be more to it.”