Saturday, 1 December 2012

How to save $100 billion: ban tobacco

As the President and Congress argue about how to cut spending and avoid the fiscal cliff, it occurred to me that there is one step they could take, which would cut $100 billion per year, with a single, one-page legislative bill signed by the President.

Ban tobacco.

The health care costs from smoking and other forms of tobacco come to about $100 billion a year, and most of that comes in the form of government-run health care. Get rid of tobacco, and the government costs disappear, and the private costs can be offset in lower taxes.

It has been argued that such prohibition has been tried once before, with terrible results. But tobacco in 2012 is not the same as alcohol in 1919. Tobacco is harder to produce than alcohol, which can be made in any bathtub. It is also harder to smuggle: in the 1920s alcohol was smuggled from Canada, whereas any tobacco smuggling would probably have to come all the way from China. Also smoking is not as prevalent in society as drinking was a century ago. Also, alcohol, unlike tobacco, can be safe taken in moderation. And although prohibition in the 1920s had the unintended side effect of creating an organized crime network to smuggle the contraband, today organized crime is already smuggling tobacco: now they will have a much harder time doing it.

Banning tobacco will of course have other benefits. It will save the lives, health and finances of millions of low-income families, 400,000 lives each year. It removes a critical threat to our children. Workplace productivity will skyrocket: no more smoke breaks. It will de-fang a gigantic, dangerous industry with a huge lobbying arm. We can put those farmers to work growing food we need and bringing down food costs. And it will screw over some politicians who deserve a good screwing over, like Mitch McConnell and Rand Paul. And if we keep it on the table as a regulated drug, we still get tax revenue.

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