Posted by: endithinks | October 14, 2008

On Bailouts, Buyouts and Bribes

What happened on Sunday is the end of any chance of fiscal conservatism.  The world leaders lead by the United States decided to inject direct deposits into banks.  The economists and pundits on the idiot box like to use fancy sounding words to basically say that we all just bribed the banks to stop being so scared of the big bad world and to come out and play again.

I don’t care that the stock markets recovered.  This direct dumping of cash into banks that have made poor decisions and been feeding off the public teat for too long has set a major irreversible precedent.  If the banks get scared enough they can make pure profit for no reason.  We have basically given them a loaded gun and put our heads next to the barrel with our hands strapped behind our backs.

We cannot throw money at every problem.  I’ve said this many times before and the fact that the United States is throwing 250 Billion dollars directly into the hands of those that are shivering in the corner is a slap in the face of the millions of people here in the states who are actually shivering under the thin cover of newspapers and huddled underneath bridges and dumpsters.

How much better would it be for our society if that money was put towards long term goals such as ending poverty here in the country?  That 250 Billion could be used to build and fund drug treatment centers, hospitals, mental health institutes and trade schools.  Let’s break down the 250 billion dollars in another way.  Let’s look at one area where America is struggling: the war on drugs.

Treatment

     

  1. “Domestic enforcement costs 4 times as much as treatment for a given amount of user reduction, 7 times as much for consumption reduction, and 15 times as much for societal cost reduction.” 

    Source: Rydell, C.P. & Everingham, S.S., Controlling Cocaine, Prepared for the Office of National Drug Control Policy and the United States Army (Santa Monica, CA: Drug Policy Research Center, RAND Corporation, 1994), p. xvi.

     

  2. “An additional cocaine-control dollar generates societal cost savings of 15 cents if used for source-country control, 32 cents if used for interdiction, and 52 cents if used for domestic enforcement. In contrast, the savings from treatment programs are larger than control costs: an additional cocaine-control dollar generates societal cost savings of $7.48 if used for treatment.” 

    Source: Rydell, C.P. & Everingham, S.S., Controlling Cocaine, Prepared for the Office of National Drug Control Policy and the United States Army (Santa Monica, CA: Drug Policy Research Center, RAND Corporation, 1994), p. 42.

     

  3. The RAND Corporation found that the additional spending needed to achieve a 1% reduction in the number of cocaine users varies according to the sort of program used, and that treatment is the most cost-effective:
    Control Program Additional spending needed to achieve a 1% reduction in number of cocaine users
    Source-Country Control $2,062,000,000
    Interdiction $964,000,000
    Domestic Enforcement $675,000,000
    Treatment $155,000,000

     

    Source: Rydell, C.P. & Everingham, S.S., Controlling Cocaine, Prepared for the Office of National Drug Control Policy and the United States Army (Santa Monica, CA: Drug Policy Research Center, RAND Corporation, 1994), p. 36.

     

  4. The US Office of National Drug Control Strategy estimated that the federal government spent $2.942 billion on treatment and treatment research in 2006 and an estimated $2.943 billion in 2007. 

    Source: “National Drug Control Strategy: FY2008 Budget Summary,” Office of National Drug Control Policy (ONDCP) (Washington, DC: Executive Office of the President, Feb. 2007), p. 9, Table 1.

     

  5. In 2002, federal funding for drug treatment totaled $3,587,500,000, representing 19.1% of the $18,822,800,000 drug war budget. The FY2003 request for treatment funding was $3,811,700,000, which represents 19.9% of the $19,179,700,000 requested drug war budget. Combined, federal prevention and treatment funding — the demand-side — totaled $6,136,100,000 in FY2002, and a requested $6,285,100,000 for FY2003. Law enforcement and interdiction — the supply-side of the equation — ate up the remaining two-thirds of federal drug war spending, or $12,686,700,000 in FY2002, and $12,894,600,000 requested in FY2003. 

    Source:  “National Drug Control Strategy: FY2003 Budget Summary,” Office of National Drug Control Policy (ONDCP) (Washington, DC: Executive Office of the President, Feb. 2002), p. 6, Table 2.

     

  6. “In 2005, an estimated 22.2 million persons aged 12 or older were classified with substance dependence or abuse in the past year (9.1 percent of the population aged 12 or older) (Figure 7.1). Of these, 3.3 million were classified with dependence on or abuse of both alcohol and illicit drugs, 3.6 million were dependent on or abused illicit drugs but not alcohol, and 15.4 million were dependent on or abused alcohol but not illicit drugs.
    “Between 2002 and 2005, there was no change in the number of persons with substance dependence or abuse (22.0 million in 2002, 21.6 million in 2003, 22.5 million in 2004, and 22.2 million in 2005).
    “There were 18.7 million persons aged 12 or older classified with dependence on or abuse of alcohol in 2005 (7.7 percent). This estimate has remained stable since 2002.” 

    Source: Substance Abuse and Mental Health Services Administration, “Results from the 2005 National Survey on Drug Use and Health: National Findings,” (Rockville, MD: Office of Applied Studies, SAMHSA), NSDUH Series H-30, DHHS Publication No. SMA 06-4194, p. 67.

     

  7. The National Survey on Drug Use and Health estimated that “In 2005, the number of persons aged 12 or older needing treatment for an illicit drug or alcohol use problem was 23.2 million (9.5 percent of the population aged 12 or older) (Figure 7.6). Of these, 2.3 million (0.9 percent of persons aged 12 or older and 10.0 percent of those who needed treatment) received treatment at a specialty facility. Thus, there were 20.9 million persons (8.6 percent of the population aged 12 or older) who needed treatment for an illicit drug or alcohol use problem but did not receive treatment at a specialty substance abuse facility in the past year.” 

    Source: Substance Abuse and Mental Health Services Administration, “Results from the 2005 National Survey on Drug Use and Health: National Findings,” (Rockville, MD: Office of Applied Studies, SAMHSA), NSDUH Series H-30, DHHS Publication No. SMA 06-4194, p. 75.

     

  8. According to the National Treatment Improvement Evaluation Study (NTIES), “The results show substantial reductions in criminal behavior and arrests after treatment: Selling drugs declined by 78 percent; Those who reported shoplifting declined by almost 82 percent; Before treatment, almost half the respondents reported “beating someone up.” Following treatment that number declined to 11 percent; a 78 percent decrease; Changes in arrest rates were less striking than those in self-reported criminal behavior, but the 64 percent reduction in arrests for any crime was still dramatic; and The percentage who largely supported themselves through illegal activity dropped by nearly half – decreasing more than 48 percent.” 

    Source:  National Clearinghouse for Alcohol and Drug Information, US Dept. of Health and Human Services, “National Treatment Improvement Evaluation Study – Costs of Treatment,” from the web at http://ncadi.samhsa.gov/govstudy/f027/crime.aspx?, last accessed Sept. 22, 2006

     

  9. According to the 1997 National Treatment Improvement Evaluation Study (NTIES), “Treatment appears to be cost effective, particularly when compared to incarceration, which is often the alternative. Treatment costs ranged from a low of about $1,800 per client to a high of approximately $6,800 per client. While the cost of incarceration was not examined by NTIES, widely reported studies such as one reported by the American Correctional Association, gave an estimated 1994 cost of incarceration as $18,330 annually.” 

    Source:  National Clearinghouse for Alcohol and Drug Information, US Dept. of Health and Human Services, “National Treatment Improvement Evaluation Study – Costs of Treatment,” from the web at http://ncadi.samhsa.gov/govstudy/f027/costs.aspx?, last accessed Sept. 22, 2006.

     

  10. In January 2001, the National Center on Addiction and Substance Abuse at Columbia University published an analysis of costs to states from tobacco, alcohol and other drug addiction. According to the report, “States report spending $2.5 billion a year on treatment. States did not distinguish whether the treatment was for alcohol, illicit drug abuse or nicotine addiction. Of the $2.5 billion total, $695 million is spent through the departments of health and $633 million through the state substance abuse agencies. We believe that virtually all of these funds are spent on alcohol and illegal drug treatment.” 

    Source: National Center on Addiction and Substance Abuse at Columbia University, “Shoveling Up: The Impact of Substance Abuse on State Budgets” (New York, NY: CASA, Jan. 2001), p. 24.

     

  11. In January 2001, the National Center on Addiction and Substance Abuse at Columbia University published an analysis of costs to states from tobacco, alcohol and other drug addiction. According to the report, “The justice system spends $433 million on treatment: $149 million for state prison inmates; $103 million for those on probation and parole; $133 million for juvenile offenders; $46 million to help localities treat offenders; $1 million on drug courts. Treatment provided by mental health institutions for co-morbid patients totals $241 million. The remaining $492 million is for the substance abuse portion of state employee assistance programs ($97 million), treatment programs for adults involved in child welfare services ($4.5 million) and capital spending for the construction of treatment facilities ($391 million). (Figure 4.B)” 

    Source: National Center on Addiction and Substance Abuse at Columbia University, “Shoveling Up: The Impact of Substance Abuse on State Budgets (New York, NY: CASA, Jan. 2001), p. 24.

     

  12. “The Panel anxiously awaits the time when the disease of addiction is no longer treated as a criminal justice issue, but as a public health problem. Moreover, the Panel embraces the notion of a society that enables any individual with a substance abuse problem, regardless of criminal history, to receive treatment in a safe and respectful environment. The Panel hopes to create a climate in which people who are at risk for, suffering from, or in recovery from alcohol or other drug addiction are valued and treated with dignity.” 

    Source: US Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, “Changing the Conversation: Improving Substance Abuse Treatment: The National Treatment Plan Initiative; Panel Reports, Public Hearings, and Participant Acknowledgements” (Washington, DC: SAMHSA, November 2000), p. 41.

     

  13. “According to the ONDCP’s 1999 National Drug Control Strategy, there are approximately 4 million chronic drug users in the United States. This closely aligns with the 1998 National Household Survey on Drug Abuse, which found that 4.1 million people were in need of drug treatment. The NIAAA report, Improving the Delivery of Alcohol Treatment and Prevention Services, estimates there are 14 million alcohol abusers, whereas the 1998 National Household Survey on Drug Abuse finds approximately 9.7 million people in need of alcohol treatment. Regardless of the source, a conservative estimate of those in need of substance abuse treatment is between 13 and 16 million people. In contrast, both the 1997 Institute of Medicine (IOM) report, Managing Managed Care, and the 1998 National Household Survey conclude that approximately 3 million people receive care for alcohol or drugs in one year. Although, as previously stated, neither the estimates of need nor the estimates of those in treatment are all inclusive, the picture remains the same – more than 10 million people who need treatment each year are not receiving it.” 

    Source: US Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, “Changing the Conversation: Improving Substance Abuse Treatment: The National Treatment Plan Initiative; Panel Reports, Public Hearings, and Participant Acknowledgements” (Washington, DC: SAMHSA, November 2000), p. 6.

     

  14. A study by researchers at Substance Abuse Mental Health Services Administration has indicated that 48% of the need for drug treatment, not including alcohol abuse, is unmet in the United States. 

    Source: Woodward, A., Epstein, J., Gfroerer, J., Melnick, D., Thoreson, R., and Wilson, D., “The Drug Abuse Treatment Gap: Recent Estimates,” Health Care Financing Review, 18: 5-17 (1997).

     

  15. Treatment decreased welfare use by 10.7% and increased employment by 18.7% after one year, according to the 1996 National Treatment Improvement Evaluation Study. 

    Source: Center for Substance Abuse and Treatment, National Treatment Improvement Evaluation Study (Washington DC: US Government Printing Office, 1996), p. 11.

     

  16. A study of heroin maintenance in Switzerland for the World Health Organization concluded:
    1. The health of participants improved.
    2. Illicit cocaine and heroin use declined greatly.
    3. Housing situation improved and stabilized- most importantly there were no longer any more homeless participants.
    4. Fitness for work improved considerably, those with permanent employment more than doubled from 14% to 32%.
    5. The number of unemployed fell by half (from 44% to 20%)
    6. A third of the patients that were on welfare, left the welfare rolls. But, others went on to welfare to compensate for their lost income from sales of drugs.
    7. Income from illegal and semi-legal activities decreased significantly, from 69% of participants to 10%.
    8. The number of offenders and offenses decreased by about 60% during the first 6 months of treatment.
    9. The retention rate was average for treatment programs. 89% over 6 months, and 69% over 18 months.
    10. More than half of the dropouts did so to switch to another form of treatment. 83 of the participants did so to switch to an abstinence-based treatment, and it is expected that this number will grow as the duration of individual treatment increases.
    11. There were no overdoses from drugs prescribed by the program. 

     

    Source: Robert Ali, et al, Report of the External Panel on the Evaluation of the Swiss Scientific Studies of Medically Prescribed Narcotics to Drug Addicts (New York, NY: The World Health Organization, April 1999).

     

So according to these reports the entire spending on drug treatment in the States is roughly 100 billion dollars annually.  So we could have funded treatment for the entire country for two entire years on the amount that we are throwing at the quivering bankers.  Let’s look at one more area where we are struggling education.

We spent about 100 billion on federal funded education in 2002.   So we could once again fund the entire federal spending on education with half of the money we are tossing to the bankers who are holding their money to their chests and rocking back and forth on the floor jumping at every sound.

On another note it costs 57 million to start 67 small highschools in New York by the Gates foundation.  So with a smidgen of the money we are tossing to cowards we could be funding many schools with smaller class sizes, smaller student bodies and more advance pay for the teachers. 

The bailout is a horrible precedent that shows us how out of whack our priorities are.  No more money to greedy scared bankers.  Let’s rebuild America from the ground up.

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