Economics

In a forthcoming study for the Cato Institute, Jeffrey A. Miron, senior lecturer on economics at Harvard University and a senior fellow at Cato, and Katherine Waldock, professor of economics at New York University, estimate that legalizing drugs would save the government approximately $41.3 billion annually on expenditures related to the enforcement of prohibition. Just as important, drug legalization would translate into higher tax revenues generated by the sale of these newly-legalized products in the open commercial marketplace. Drug legalization would yield tax revenues of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco, they said.

The kidnappings of five petroleum company workers along with 30 others have terrorized the oil community, paralyzing segments of the business. Months later, families have still heard nothing.

Increasing drug prohibition violence in Mexico poses a risk to the nation’s credit rating in the “medium term” and may threaten economic growth. The violence is shaving 1.2 percentage points off the economy annually, Finance Minister Ernesto Cordero said today. Moody’s probably won’t downgrade the country before President Felipe Calderon’s term ends in 2012.