Can legalizing marijuana save the economy?

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There is a lot of talk about legalizing marijuana in the U.S. Much of the talk right now is centered in California where voters will go to the polls on November 2 and decide whether they should pass Proposition 19. If the measure passes the vote, then it will make marijuana in California legal and be taxed and viewed similar to tobacco. One of the main arguments for passing this measure in California and throughout the U.S. (even though it’s currently not an option outside of California) is the potential economic benefit it would have.

California, as well as, the rest of the country is in a serious debt situation at the moment. The argument is that legalizing marijuana will not only save money by not having to put people in jail and wasting government resources like the police, but at the same time would bring in new revenue by way of taxes on the pot. It is very true that legalizing marijuana would both save money and bring in new tax money to the government. However, the impact that money would have on the economy is grossly overstated.

Economists estimate that by legalizing marijuana, a little under $9 billion a year would be saved. In addition, about an equal amount would also be gained through tax revenue. So we are basically looking at an extra $18 billion a year for the government by legalizing pot. This amount of money is literally a drop in the ocean compared to the debt the country has. That figure alone is not even worth mentioning and thus, should not be used as an argument in this issue. Doing so is simply misleading and really makes the case to legalize it seem weak.

I am not saying that marijuana should not be legalized (I am actually not indicating what I think they should do on this issue), but I am saying that if they want to have an intelligent debate on the issue than leave the economy out of it. Frankly, both sides do have good points to support their cases and those points should be discussed more. Instead, we are focusing on economic benefits that are simply irrelevant given the minimal impact $18 billion will have on the U.S. economy.