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How to Drain the Swamp: End the Failed War on Drugs, Part 2


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According to the most comprehensive investigations, the United States spends nearly $50 billion per year on the war on drugs — including about $34 billion annually at the state and local level for police, courts, and incarceration. By contrast, it is estimated that were drugs to be legalized and taxed at the same average rate across the country as alcohol and tobacco, the revenue yield would be about $50 billion to the positive side of the ledger.

So the question recurs as to why the nation’s fiscally impaired governments collectively endure this $100 billion opportunity cost? That is, fund massive outlays for law enforcement when they could readily step aside and turn the whole drug- distribution business over to Phillip Morris, Pfizer, and Walgreens?

At the end of the day, we contend that the reason lies in the failure of the GOP to understand and implement its own principles about limited government and free markets. So doing, it provides legislative votes, philosophical sanction, and bipartisan political cover for Beltway enterprises that eventually fill the swamp with fiscal waste and societal dysfunction.

As to the former, prevention of self-inflicted harm is never, ever a good reason for state intervention in the private lives of its citizens. The essence of liberty is that people have the right to choose for better or worse when it comes to their own health and well-being.

Moreover, even setting aside this fundamental principle of individual liberty, the lesson of this type of “prohibition” from time immemorial is that it invariably fails to change behaviors, and causes enormous collateral damage to boot.

Invariably, the apparatus of state control and criminal enforcement merely drive proscribed activities from the efficient, pacific venues of free-market commerce into the violent, exploitive netherworld of black-market distribution.

Needless to say, that’s a heavy societal price to pay for nothing in return. Yet the chart below dramatizes in purely utilitarian terms that the war on drugs is an unmitigated bust.

By 2003 the federal campaign against illicit drugs was already 30 years old and nearly $10 billion was being spent by Uncle Sam on domestic law enforcement, border interdiction, and international drug-control initiatives; and another $7 billion was being spent on treatment and prevention. Yet $17 billion of federal drug-control spending was having no impact whatsoever.

The rate of use had remained at about 8 percent of the population 12 years and older for decades; nor did it budge as federal spending continued to climb in the years ahead. In fact, by FY 2016 the federal budget for enforcement, treatment, and prevention had reached $30.5 billion annually, but the drug-use rate had actually crept up to 9.0 percent of the population.

The flat-lining chart puts you in mind of the famous definition of insanity — doing the same thing over and over and expecting a different result. Yet that goes right to the heart of the Washington Swamp that Donald Trump has proposed to drain.

To wit, when there is bipartisan consensus on a politically exploitable issue like the social tragedies of drug abuse and deaths, the Beltway spending machine flat-out cannot be stopped. It becomes a perpetual- motion contraption that gets re-authorized and re-funded year after year because inertia and log-rolling are the driving forces of the domestic welfare state.

Even if some intrepid critic of the false purposes underlying these bipartisan spending silos attempts to challenge them, it is invariably for naught.

The weed that cannot be exterminated

On the entitlement side of the ledger, of course, programs go on automatically by law forever, while in areas of discretionary funding like the drug-control programs, virtually the same outcome pertains. That is, Washington has become so dysfunctional and immersed in self-perpetuation that it never chooses, decides, allocates, or rejects; it essentially operates by continuing resolution — last year’s spending plus a little more, year after year, for any program function that ever gets started and embraced by both parties.

The GOP’s complicity in this horrid stalemate was evident almost from the beginning of the war on drugs. After Nixon launched it, total spending grew modestly to about $1.7 billion per year by the time that Ronald Reagan arrived to drain the swamp in 1981. As it happened, however, the drug-control swamp got immeasurably deeper during the next 12 years of Reagan/Bush superintendence.

To wit, by FY 1993 when the man who  claimed he didn’t inhale — Bill Clinton — moved into the White House the so-called national drug-control budget was up to $12.7 billion, meaning that it had ballooned at an 18 percent compound annual rate during the years of GOP rule.

As it happened, I was on the losing end of that budget breakaway. In the first Reagan budget, we had actually sharply curtailed spending for the drug-control programs at the DEA, FBI, and other agencies based on the above principles and the necessities of fiscal triage. Drug control falls to the bottom of the list when you are trying to actually balance the federal budget.

Accordingly, the federal drug- control budget was pegged at less than $1 billion and was heading toward the shallow end of the swamp in the outyears. But that didn’t last long — not even one budget season.

That’s because the Heritage Foundation-style conservatives in the administration were able to quickly redefine the issue. No longer was it a matter of free markets, individual liberty, and fiscal rectitude. Instead, it became a matter of generic “law enforcement”.

Accordingly, the White House budget rollback of the war on drugs ended up DOA on Capitol Hill. It took all of three months to extinguish the challenge!

In fact, the principal advocates of Ronald Reagan’s renewed and up-sized war on drugs were Attorney General William French Smith and White House domestic policy counselor Ed Meese. Quite simply, they had the “law and order” brief and endless opinion polls which supported a crackdown on illegal drugs, and that’s all it took.

Oh, and they also were sure to wear their Adam Smith ties whenever the issue was put to the president.

That historical lesson is also why Donald Trump’s prospective campaign to drain the swamp is going to be so profoundly unsuccessful. He has campaigned on and embraced exactly the kind of generic “do gooder” principles that shield the bipartisan consensus from challenge. To wit, the most dangerous soundbites Trump ever uttered are “law and order”, “strong defense” and “25 million jobs.”

Those slogans will keep the Trump administration buried in the swamp just as the “law and order” brief back in the 1980s enabled the most fiscally conservative administration in modern times to increase spending on the war on drugs by 7X.

As I described in part 1, the upward march of spending for the wrong-headed and failed war on drugs has not abated. During the year just ended, spending totaled $30.5 billion, representing nearly a 9 percent annual growth rate since the abortive challenge of 1981.

But outside the annihilation of 125 million cannabis plants and the annual arrest of 1.4 million young men — mostly black and Hispanic and mostly for simple possession and small-time dealing — this colossal waste of money has accomplished only one thing: It has visited untold drug-cartel violence and mayhem on the nation’s borders and inner cities, and over several decades put upwards of 20 million young citizens through crime-training schools while incarcerated on drug charges.

Worse still, this pointless war has insinuated itself so deeply and broadly in the federal budget that it has actually become the “weed” which cannot be exterminated. More than 50 agencies and departments share in the $30.5 billion jackpot and much of that goes for purposes that outright deny the reality that ineradicable criminal black markets will always emerge when the state makes a commodity artificially scarce and thereby generates vast windfall margins and profits.

It’s the latter which provides the financial wherewithal by which the criminal cartels man-up, arm-up, and operate multi-billion distribution systems. It is also what makes government interdiction and enforcement efforts so futile. Every truckload of contraband seized is just the cost of doing business and can be accommodated in the bloated margins available on controlled substances.

For instance, in its budget presentation last year, the DEA crowed that it had deprived drug-distribution organizations of $25 billion in revenue during the most recent year by seizing, burning, and destroying crops and processed cargos.

The jackpots

So what! The very interdiction and seizure efforts that led to this estimate, also increased the product scarcity, drove its street prices even higher than would pertain in a Phillip Morris vending machine on the free market, and therefore paid for the cost of product lost to law enforcement. The law of supply and demand does will out — and especially in the face of feckless government interventions like these.

Thus, last year $4.5 billion of the drug-control budget was spent on “interdiction.” This included $2.4 billion for border control and customs operations, $1.3 billion for the Coast Guard, and $435 million for DoD’s counterdrug programs to “detect, monitor and support the disruption of drug trafficking organizations”.

So, yes, it is apparently a real war that fully validates the theorem about insanity. The DoD has been doing interdictions for decades, and there has been no reduction in drug supply or use at all; just an increase in the level of violence involved in bringing it into the United States at illegal crossings.

Then another $1.6 billion was spent last year under the rubric of “international” drug-control programs. Naturally, the State Department got in on that action with $380 million for its own “Bureau of International Narcotics and Law Enforcement.” So did the Agency for International Development, which got $132 million to help persuade desperate farmers in drug- producing third-world countries not to produce the high-value cash crops that the war on drugs actually enables.

Finally, the DoD got another $560 million for its “International Counternarcotics Efforts,” which comes on top of the previously itemized amounts for “interdiction.”

But it is in the “Domestic Law Enforcement” component where the loot is spread far and wide, and amounts to upwards of $10 billion annually. Nearly 25 different agencies are in on the action, including small-time operations like the “Methamphetamine Enforcement and Lab Cleanup” grants, which amount to $11 million per year, and the Federal Law Enforcement Training Center, which gets $43 million.

On the other end of the spectrum are the big bucks for “investigations,” which total $3.3 billion and go to the DEA, FBI, and other DOJ operations; and also Homeland Security ($540 million), Treasury ($96 million), and also lesser amounts to DoD, Interior, and Agriculture.

After that comes $875 million for “Prosecution,” which is spread among a dozen agencies. Major amounts go to the DOJ’s Organized Crime Drug Enforcement Task Force ($160 million), the U.S. Marshals Service ($144 million), the federal judiciary ($450 million), and lesser amounts to the DOJ criminal division, the U.S. Attorneys, and many more.

Then there is “Corrections,” totaling $4.5 billion. From that particular bucket, the U.S. Bureau of Prisons draws $3.4 billion, the Federal Judiciary gets $600 million, and the U.S. Marshals dip again for $500 million. Needless to say, not a dime of that would be needed if drugs were sold at far cheaper prices by reputable firms on the free market.

Still, “enforcement” is only part of the budgetary outpouring. There is also $1.5 billion for “prevention,” which is shunted through at least 10 different programs. The latter have also failed, as evidenced by rising use and addiction rates. But they are the archetypical sop to liberals in return for their support of the overall war on drug enterprise.

Finally, the federally funded treatment and research programs — costing upwards of $13 billion annually — are too numerous to specify. Beyond the billions that go through Medicare and Medicaid there is also $700 million for VA treatment programs, $450 million for HSS substance-abuse and mental-health grants to state and local government, $700 million for NIH research, $500 million for HUD to take care of homeless addicts, $75 million for DoD health services, $92 million for drug courts, and then two more of especial salience.

The Bureau of Prisons gets $118 million to treat drug offenders while they are incarcerated, and then additional agencies at DOJ and HSS get another $60 million for prisoner “reentry programs” when they are released.

Then again, neither program would be needed if these guests at Uncle Sam’s hospitality facilities had not been arrested in the first place.

In a word, the above catalogue of spending programs is what lies at the bottom of the Beltway swamp for hundreds of like and similar federal program silos. The above described $30 billion war on drugs silo is seemingly invulnerable to reduction owing to the bipartisan consensus as to the broad function of “law enforcement”; and because the loot has now been spread among so many agencies and congressional authorization and appropriations committees that it is virtually immune to attack.

So if we go back to our 1981 proposition, it is surely true that at $30 billion per year the war on drugs is even more ripe for the budget knife than it was back then at $1.7 billion — purely as a matter of priority rankings and fiscal triage. If that pointless pool can’t be drained, it might be asked, what part of the Beltway swamp can be?

Alas, don’t count on the Donald or his incipient administration to even consider the task. Trump ran a demagogic campaign on law and order, including a pledge to stop all illicit drugs at his wall on the border and to rid the land of the scourge of heroin addiction.

Likewise, his attorney general, Jeff Sessions, is a solid conservative on constitutional matters, but he is as bad as Ed Meese and Bill Smith rolled into one with respect to the war on drugs. And General Kelly at Homeland Security never saw a contraband cargo he didn’t want to interdict, and now has the vast resources of the Homeland Security Department to do exactly that.

Yes, the war on drugs is a 45-year failure that wastes vast sums of scarce fiscal resources and wreaks havoc on the nation’s borders and communities. It’s the very first place to begin draining the swamp.

But if by every indication the Trump administration doesn’t even try, then it might well be asked, Exactly what part of the swamp is it that the Donald actually plans to drain?

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    David Alan Stockman is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan and as the Director of the Office of Management and Budget under President Ronald Reagan.