United for a Fair Economy

The Economics of the Illegal Drug Trade

The illegal drug industry has always been a lucrative for those who pursue it. In recent years, organized crime has turned towards globalization, which has increased the amounts of money being made by top tier sellers of illegal drugs like cocaine, Ecstasy, heroin, amphetamines, and others.

 

According to estimates released by the United States government, people spend upwards of $60 billion dollars per year on illegal substances in America. These drugs are typically inexpensive to make and have a huge profit margin when sold at street level prices. For example, one kilo of heroin in Pakistan is $2,600. The average street price in the United States amount to as much as $130,000 a kilo, as reported by PBS’s Frontline.

 

The illegal drug trade is structured like any other commodities business. The biggest cartels are set up similar to any corporate organization that has a large amount of cash flow. The cartel bosses are on the top of the ladder, and the street dealers are at the bottom. The money is distributed accordingly throughout the system. Those at the top often buy legitimate businesses as cover operations and to launder the millions of dollars they keep in stash houses or storage facilities until it can be laundered and put to use again.

 

With a markup of anywhere from 1,300% to 2,300%, there is a lot of money in the illegal drug trade. What that does for the nation’s economy is damaging. Addicts who have to spend more on their drug of choice have less money to put to use through legitimate spending. And with most cartels being outside of the US, the bulk of the cash gets put to use in other countries. Most drug money that is earned and spent in the United States is taken out of the country for good. Add that to the amount spent to fund the drug war, and the United States economy suffers a loss of around $41.3 billion each year, according to The Economist.

 

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How is the Economy Doing So Far Under President Trump?

There have been many different opinions about the economy so far under President Donald Trump. According to CNN money, there is reason to be mostly positive about the current state of the economy. In the first three months of the year, there was growth, though it was slow. However, it is also known that Trump cannot take responsibility for the first three months of the year as far as the U.S. economy is concerned. His policies haven’t had time to work through the economy.

Others are more skeptical. Washington Post criticized the first three months of the year, stating that after the government reported that the American economy expanded in the first quarter of this year at its slowest pace in three years, Trump got a glimpse at how far he needs to go to bring growth to the economy.

On Monday, Warren Buffett said that President Donald Trump has not yet contributed much to the economy of America. On CNBC’s “Squawk Box,” the billionaire investor stated, “I don’t think he’s had that much of an effect on the economy yet.” He went on to say, “I do not make investment or business decisions based on who is president or who I think is going to be president. I have never called a president in my life. Never.”

Donald Trump said that his tax cut would pay for itself. However, most economists don’t agree. While Trump’s main platform in the election was “making America great again,” which largely focused around economic improvement, that has not been the case, and top investors like Warren Buffett have been there to point this out.

It is not clear at this point whether President Trump will be a good force for the U.S. economy. Some economists are arguing that Trump will be a good thing in terms of perpetuating economic growth while others state that he will not. All we can do as economists is jwatch carefully.

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The U.S. Economy Only Grew by 1.6% in 2016

Studies have just reported that the US economy only grew by 1.6% in 2016. This was the weakest performance in five years, and it decreased from 2.4% in 2014 and 2.6% in 2015. This was the worst year for the growth of the economy since 2011.

President Trump has a goal to double the amount of growth in the economy with a stimulus program. This program includes deregulation, tax cuts, and higher infrastructure spending.

There are different theories about what caused 2016 to be such a weak year in terms of economic growth. Others say that America has seen consistent growth over a longer period of seven years. It has just been at a slow pace.

It is also true that while the unemployment rate was 10% in 2009, it is now at 4.7%. Other measures of the job market have shown improvement as well.

Proponents of Trump’s reform ideas say that his economic reform will lift productivity and growth in America. The stock market is up, and consumer optimism also seems to be optimistic about Trump’s plan.

Opponents, however, say that they do not believe Trump will help to grow the econ0my. People have also criticized his business dealings and his bankruptcies in the past.

It will be interesting to see whether or not President Trump is actually able to help the U.S. economy grow more in 2017.

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What is the Economic Impact of Substance Abuse?

Studies have shown that substance abuse is costing employers over $275 billion a year in productivity and costs. According to the Substance Abuse and Mental Health Services Administration, out of all of the people who currently have a drug or alcohol problem, three-quarters of them are employed. These people have higher health care costs, and they are also more likely to be involved in workplace accidents.

The Center for Disease Control and Prevention suggests employers help to keep costs down due to substance abuse by employing drug tests and by offering assistance programs. If your employees are having problems in the workplace and you suspect he or she may have a drug or alcohol problem, he or she may need to go to a rehabilitation program like the one at The Recovery Village or join a 12-step program like Alcoholics Anonymous.

How do you know if your employees are having drug or alcohol problems? There are several indicators. If your employees are having problems with attendance, poor quality or quantity of work, or problems related to customers and/or clients, you may want to consider that they are having drug and/or alcohol problems.

It’s important to sit down with any employees that you think may need help or treatment as soon as possible. Not only will you be helping your business and your workplace environment, but you may just be helping your employees to turn their lives around and get help that they wouldn’t otherwise seek.

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