The 1998 out-of-court settlements of litigation by the states against the cigarette industry totaled $243 billion, making it the largest payoff ever in the U.S. civil justice system. Two key questions drove the lawsuits and the attendant settlement: Do smokers understand the risks of smoking? And does smoking impose net financial costs on the states? This book provides unexpected answers to these questions, drawing on a large range of data on several topics central to the smoking policy debate. Based on surveys of smokers in the United States and Spain, for instance, it demonstrates that smokers actually overestimate the dangers of smoking, indicating that they are well aware of the risks involved in their choice to smoke. And while smoking does increase medical costs to the states, the book finds that these costs are more than financially balanced by the premature mortality of smokers, which reduces their demands on state pension and health programs, so that, on average, smoking either pays for itself or generates revenues for the states. The book's assessment of the tobacco lawsuits also includes policy recommendations that could frame these debates in a more productive way, such as the suggestion that the FDA should develop a rating system for tobacco products based on their relative safety, thus providing an incentive for tobacco manufacturers to compete among themselves to produce safer cigarettes. This hard look at the facts of smoking and its costs runs against conventional thinking. But it is also necessary for an informed and realistic debate about the legal, financial, and social consequences of the tobacco lawsuits.