Tag Archives: debt

While We Are Wringing Our Hands….

While we wait for the impact of sequestration to hit, we might ponder this: In an interview with Spiegel Online, a Harvard economist insisted that we could save an amount equal to the sequestration cuts every year  just by ending the War on Drugs.

“The prohibition of drugs is the worst solution for preventing abuse,” said Professor Jeffrey Miron. “Firstly, it brings about a black market that is corrupt and costs human lives. Secondly, it constrains people who wouldn’t abuse drugs. Thirdly, prohibiting drugs is expensive.”

I have made this point before.

The direct costs of our counterproductive drug war have been estimated at more than 60 billion dollars a year. And yet, in all the years we have pursued this war, we have not reduced the percentage of Americans using hard drugs. Instead, that sixty billion dollars a year has destroyed lives, incentivized criminal activity, increased police corruption, laid waste to several South American countries, and decimated inner city neighborhoods.

If our elected officials are really so intent upon reducing the national debt, wouldn’t it make more sense to stop spending enormous sums for a failed policy, and use at least some of the savings for treatment? Better still, we could legalize marijuana–which medical experts tell us is less dangerous than booze–and tax it.

I don’t know whether we’d save more than the sequester, but abandoning a failed, horrifically expensive program would be a far more rational approach than taking an indiscriminate, meat ax approach to the budget.

Debt and Taxes

It doesn’t take long for my students to learn that “it depends” is almost always the right answer to policy questions. The world is complicated, and questions about how government should operate are rarely black or white.

In an excellent column about debt and taxes, Morton Marcus makes precisely that point. Debt incurred in order to make investments in the future is good; borrowing in order to shift costs properly paid for with current tax dollars–is bad. Borrowing to invest in education, transportation and communications will make life better for our children and grandchildren, and will increase their ability to pay that debt. Borrowing in order to avoid raising taxes to pay for the wars in Iraq and Afghanistan does not make life better for future generations; it merely saddles those generations with bills that we didn’t want to pay.

The issue isn’t whether debt is good or bad. It isn’t even whether it is too big. The issue is whether the borrowed dollars were used to make wise investments, or were used instead to allow current generations to say “charge it” to the future.

With debt, as with so much else, it depends.