Drugs - Expenditures On Drug Control

How much will it take to control the drug trade? How much public spending will it take? This panel is an attempt to give that question some shape and form. Shown in the graphic are two time series and a point. The top curve shows what people have been spending on illegal drugs. The bottom curve shows federal expenditures on drug control. Both curves are in constant 1998 dollars. For 1998, the diamond shows the total expended by all states on the criminal justice portion of drug control, $30.7 billion. The bars show the federal drug budget as a percentage of public spending on illegal drugs.

Let's focus on the year 1998. In that year the Federal government expended $15.2 billion on drug-related programs. Domestic law enforcement was $9.5 billion or 63% of that. The only data for the several states' budgets we have is for 1998. In that year the states spent $30.7 billion on the "justice" side of the subject. This means that, all told, some $45.9 billion in public money was spent in 1998 to try to prevent the public from spending $65.6 billion on drugs.

In the 1989 to 2000 period, spending on drugs declined 42%, principally because prices for drugs dropped; tonnage of drugs actually increased. The federal budget increased nearly 93%. It had no effect on the amount of drugs consumed although, indirectly perhaps, it might have caused the number of drug users to drop. No clear case is visible, however.

2001 Federal Budget

A closer look at the Federal budget for drug control shows how at least a third of the money spent on this activity is subdivided into categories. One may assume that the states are continuing to spent twice again as much as does the Federal Government. The data shown are for the 2001 FY budget. Domestic law enforcement in that year had dropped to 51% of the total. If International expenditures and Interdiction are added, the budget is strongly tilted toward stemming the supply. These three categories add up to 78% of the total. Of the remainder, the largest portion is for Drug Abuse Treatment (16%) and Drug Abuse Prevention (11%). The rest is for research.

It is well to note that this war has been going on since about 1900 (the reaction against opium) or since 1970 (Nixon's "war on drugs."). In between, the nation lashed out against alcohol, but that initiative collapsed. Despite all efforts, millions of people spent billions on illegal drugs. How to explain this?

One can point at four horsemen of this particular apocalypse. The first is the misery, anomie, and the helplessness of the slums, barrios, and ghettos of our major cities — where drugs offer an escape and a source of income. The second is the recklessness of an ever more pampered youth, always testing boundaries in irresponsible ways (pill-popping and marijuana). A third is the recurrence of periods of "irrational exuberance" during which "masters of the universe" reward themselves at parties with a line of coke. And the fourth is third-world countries that have found cash crops to sell, at relatively modest profits, to the richest nation of the world.

Sources: Office Of National Drug Control Policy, the White House, What America's Users Spend on Illegal Drugs, 1988-1998, Abt Associates, available at http://www.whitehousedrugpolicy.gov/publications/pdf/spending_drugs_1988_1998.pdf. Budget data from U.S. Department of Justice, posted at http://www.ojp.usdoj.gov/bjs/dcf/dcb.htm.