Monday, March 2, 2009

My economic stimulus plan: lower the drinking age.

Minnesota is already considering it.

There are millions of Americans wanting to give so much money to American businesses -- bars, restaurants, liquor stores -- but they can't do it legally.

Ed Morrissey at Hot Air responds to the Minnesota proposal:

In fact, the economics of the argument are usually considered a wash, since one of the points made against the ban is that teens buy alcohol on their own anyway.
I don't know who he's referring to who "usually consider[s]" it a "wash," but I find it hard to believe that many economists would seriously hold that view. Isn't it the most basic principle of economics that if you reduce the cost of goods, more people will buy them? Breaking the law has heavy built-in costs: the risk of getting in legal trouble, plus whatever extra efforts they're taking to avoid getting caught.

As long as we're just talking about the effect on the economy, this is all a question of numbers. The plan wouldn't need to increase every 18-to-20-year-old's alcohol purchases, just some of them. While "teens buy alcohol anyway" is a handy debating point, the truth is that plenty of underage people simply don't drink because they're dissuaded by the law.

Everyone knows that people under 21 already buy alcohol illegally. But you'd get a surge of economic activity if you dropped the legal barrier.

This was a good idea without the economic crisis, but it seemed politically impossible. Now that it doesn't just make sense but is also economically necessary, maybe it is possible.

blonde female bartender pours margarita alcoholic beverage at bar

(Photo by Daniel Krieger.)


LemmusLemmus said...

Also, some of the money that would go to alcohol dealers now goes to illegal drug dealers and hence can't be taxed. That's assuming illegal drugs are sometimes used as a substitute for alcohol, which seems reasonable enough.