Nearly five years ago, Mexico’s president, Felipe Calderón, declared war on the country’s powerful and vicious drug cartels. His strategy of using the military against them initially enjoyed widespread domestic popularity, as well as Washington’s strong support, but it has failed to yield results. Some 42,000 people have perished in the resulting violence, and the cartels seem more powerful than ever.

The Mexican people are increasingly disenchanted with the drug war, and influential political figures are urging a different approach. Some say the government should negotiate a truce with the cartels. Others, most notably Calderón’s predecessor, Vicente Fox, are bolder, advocating drug legalization to deprive the criminal enterprises of their vast black-market profits.

Unquestionably, the current prohibitionist strategy is not working, and it has produced horrific unintended consequences. Mexico’s carnage has reached the point where even respected analysts worry that the country could become a failed state. And leaders in the United States and Central America fear Mexico’s chaos is posing a serious threat to its neighbors.

The first concern is the less immediate one. There are powerful barriers to Mexico’s failure as a state, including a stable political system with three significant parties, a sizable legal business community with a major stake in preventing chaos, and the extremely influential Catholic Church. Those institutions are not about to cede the country to the drug cartels.

Still, there is plenty to worry about. The government’s writ is shaky and eroding in several important regions. That is especially true of the area along the U.S. border, through which the most valuable drug trafficking routes pass. Cities such as Tijuana and Ciudad Juárez have become full-blown war zones, as has the entire state of Tamaulipas, directly south of Brownsville, Texas.

Even previously peaceful areas have been convulsed by battles among the cartels and between them and the government. Mexico’s leading industrial center, Monterrey, once hailed as perhaps the most peaceful city in Latin America, is now a major front in the drug war. The principal tourist meccas are no longer untouched, either. Acapulco has experienced several wild gun battles in broad daylight, and the cartel presence is so pronounced that residents sarcastically refer to the city as Narcopulco.

There are as yet only limited instances of Mexico’s violence seeping into the United States, but its spread southward, into Central America, is already a reality. The cartels have become entrenched in most of the region’s countries, and they control vast swaths of its territory. Guatemala had to declare a state of siege along its Mexican border, and the leaders of Honduras and El Salvador warn that their countries are also in grave danger. Central America, off Washington’s security radar since the end of the Cold War, is on the verge of making a dramatic reappearance.

The United States, as the principal market for illegal drugs, faces a crucial choice as the turbulence mounts in Mexico and Central America. Illegal drugs constitute a $300 billion-a-year global industry, and the Mexican cartels account for $30 billion to $65 billion of that. Those vast revenues enable the cartels to bribe, intimidate, or kill their opponents almost at will.

Prohibition is simply driving commerce underground, creating enormous black-market profits that attract the most ruthless criminal elements. Whether Washington stays or abandons its prohibitionist course will certainly influence countries around the world.

Legalizing drugs is a controversial idea, and even its supporters concede that it’s not a panacea. But Vicente Fox puts it well: “Radical prohibition strategies have never worked.” People should consider legalization, Fox argues, “as a strategy to strike at and break the economic structure that allows gangs to generate huge profits in their trade, which feeds corruption and increases their areas of power.”

It is time for a reasoned debate about alternative strategies to deal with the growing turmoil south of the border. The current approach has failed, and the fire of drug-related violence is threatening to consume our neighbor’s home and endanger our own.