Not that anyone really cares, but I've revised my previously stated stance on this: I can't really be for this at all. In fact, I'm quite a bit against it for several reasons:
1) Why illegal drugs only? Alcohol and Tobacco are far more devastating than any illegal drugs combined, and excluding them and other things like (unauthorized) prescription drugs seems perplexing to me. Does a drug become "good" only because a government has the sanity to tax it?
2) First-strike out seems very harsh to me. If someone falls on hard times and errs exactly once, they stand to lose everything just because? Something like a three strike-rule would seem far more appropriate - and even if someone strikes out, they should be given other options, like rehab or community service instead of straight out exclusion.
Also - I can't understand the reasoning behind the sentiment that you should be owned by the government as soon as you can't find a job for a few months.
3)As far as I can tell, this has never been tested or implemented on any significant scale, so there's really no way to tell whether this would work or not. It certainly might, but it could also backfire horribly and cause far more humanitarian and financial damage than its alternative.
On the other hand, countries like Portugal have experienced much success in fighting drug problems (both personal and national) with very lenient stances towards drug abuse:
http://www.time.com/time/health/article/0,8599,1893946,00.html
4) Several consequences of this program have already been addressed in the thread, but there's one more: You'd also get flagged as an addict due to this failure and automatically presented as an undesirable and a liability, which would make even honest attempts for cleaning oneself up much harder than they should be.
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