Making Economic Sense

The drug war is responsible for trillions of wasted tax dollars and misallocated government spending, as well as devastating human costs that far outweigh the damage caused by drugs alone. The United States’ unrivaled incarceration rate is a constant financial drain, causing an immeasurable loss in workforce productivity, and puts a strain on scant legal and law enforcement resources.

DPA is working to end wasteful government spending on the drug war by leading the national dialogue about ending prohibition and refocusing resources on health-centered approaches to drug use.

Key Economic Issues

Wasted Tax Dollars

Over the past four decades, federal and state governments have poured over $1 trillion the drug war and relied on taxpayers to foot the bill. Unfortunately, these tax dollars haven’t solved the problems they were intended to solve – while creating a whole new set of huge problems.

Here are some of the fiscal costs of the war on drugs:

  • In 1980, the United States had 50,000 people behind bars for drug law violations – now we have half a million.
  • More than one million people are arrested simply for drug possession in the U.S. every year – that’s one arrest every 25 seconds.
  • Money funneled into drug enforcement has meant less funding to improve public safety and has left essential education, health, social service and public safety programs struggling to operate on meager funding.
  • Drug war advocates continue to demand more money for the same failed policies despite the fact that highly-funded law enforcement and interdiction strategies have failed to reduce drug use and drug availability. They want to keep wasting your tax dollars and destroying countless lives on a losing battle.
  • The demand for drugs in the United States has remained constant despite the United States’ enormous financial commitment to fighting the war on drugs with well-equipped drug taskforces and the full force of mass incarceration.
  • The drug war has created enormous public health costs by limiting the availability of harm reduction programs that could quell overdose and infectious disease transmission rates.

Just as disheartening as the fiscal costs of fighting a failed drug war are the opportunity costs. Think of the impact all that drug war funding could have if instead of financing the arrest and incarceration of millions of people each year, we made drug treatment more widely available, improved social service and education programs, or simply gave the money back to taxpayers.

Distorted Incentives for Law Enforcement

Ever wonder why police spend so much time enforcing failed drug laws? To find the answer, you just need to follow the money.

  • Funding schemes – Because funding for law enforcement is often based on the number of arrests made and the amount of property seized, the easiest way for local police to up their numbers and boost their careers is to target low-level drug offenders. To create arrest opportunities, police routinely rely on untrustworthy informants, conduct dangerous home invasions on flimsy evidence, frame suspects, and commit perjury.
  • Asset forfeiture laws – These laws allow law enforcement agencies to keep the property they seize during drug arrests with minimal proof, putting the burden instead on suspects to prove their own innocence. As a result, local law enforcement agencies tend to increase their focus on drug arrests, often at the expense of more pressing public safety needs.
  • The Byrne Justice Assistance Grant program – This program provides federal funding to hundreds of regional anti-drug taskforces. These taskforces are at the center of numerous scandals involving falsified government records, witness tampering, fabricated evidence, false imprisonment, stolen property, large-scale racial profiling and sexual abuse.

Supply and Demand

A prime example of the drug war’s backward logic is its distortion of the basic economic principle of supply and demand. The federal government funnels vast resources into futile criminal justice and interdiction policies intended to reduce the supply of drugs, while neglecting treatment and education strategies that could help reduce drug demand.

This focus on supply reduction has failed to reduce drug use, while provoking drug trade-related violence. The economic incentives of the illegal drug trade ensure that supply-side interdiction is an unwinnable battle. Education and treatment programs are exponentially more cost-effective and successful when it comes to addressing problematic substance use.

Internationally, the hypocrisy of American drug policy is clear. Despite being the largest consumer of drugs in the world, the U.S. focuses on violent supply reduction strategies in other countries while investing little in demand reduction strategies domestically.

Drug prohibition essentially provides a monopoly and price supports for organized crime. Forcibly limiting the supply of drugs while demand remains relatively constant only increases the profitability of drug trafficking.

Drug Prohibition and Violence

Drug enforcement officials often cite drug-related violence as a reason that drugs must be eliminated from our society, but it is actually the system of drug prohibition that causes much of the violence. Just as alcohol Prohibition fostered organized crime in the 1920s, drug prohibition empowers a dangerous illegal market throughout the United States and the world.

Prohibition has inflated the price, and thus the profit, of drugs substantially. It has also driven the drug trade underground, where there are no legal avenues for peacefully resolving disputes between competitors.

Rather than proposing specific policies for increasing prevention and treatment services to directly impact drug use in the United States, the federal government's approach to the alarming prohibition-related violence in countries like Mexico and Colombia has been to pour more money into law enforcement crackdowns on cartels and efforts to intercept drug shipments. Throughout the drug war's history, these kinds of supply-side interventions have consistently failed to reduce violence. They have instead made the illicit drug market more profitable, more competitive and more dangerous.

In countries that bear the brunt of drug war violence, such as Mexico, Bolivia and Colombia, prominent leaders are speaking up more and more about the benefits of ending prohibition. We believe ending drug prohibition is the key to reducing drug war violence in the U.S. and restoring peace to destabilized regions abroad.

Our Priorities

The Drug Policy Alliance is working to shift funding away from the same old failed policies and toward effective drug treatment and education programs. We are leading the movement to end prohibition’s drain on our economy and to protect your tax dollars from wasteful drug war spending.

We advocate for ending prohibition and treating drug use as a health issue, not a criminal justice issue. As a nation, we must learn to live with the reality of drugs and drug use and find solutions based on common sense and sound economic principles.

Here are some examples of our work:

  • DPA has joined with other civil rights and criminal justice reform groups to demand an overhaul of the Byrne Justice Assistance Grant program that would put an end to financial incentives that that are notorious for wasting taxpayer dollars and fostering corruption.
  • DPA is the leading voice calling for the Office of National Drug Control Policy to cut funding for enforcement and devote more resources to treatment and other health approaches to drug use.
  • DPA is developing public health alternatives to prohibition, including increased treatment availability and better drug education, that would help reduce the demand for drugs and minimize the influence of violent cartels.
Wasted Tax Dollars