Did it work during prohibition? NO! A loss of not only tax revenue on a local level but also on federal would be substantial.

It would be negative and pretty harsh I would think. People spend a lot when they're out drinking and not just on alcohol. Plus it's very very unconstitutional. This would something only the states could do, and there'd be a huge fiasco and the gov't would probably end up spending even MORE money.

It would be socialist. No communist.

I'd think it would negatively affect the economy but not necessarily in the manner that people may think. Some may state that taxes generated from alcohol sales would be lost, but in the scenario you've mentioned, alcohol still could be sold but only in stores. If bars were forced to close, I could see many of the bars converting into beer and/or liquor stores (depending on the laws in the state). I don't think the number of people buying alcohol would change too much. People who are going to drink are still going to drink (since it's legal). Where this would really hurt the economy is in the number of jobs. Bars tend to have more employees than beer or liquor stores (it takes many more employees to make and serve drinks at bars than to stock a store) so some people would lose jobs. Sure, each bar may only have a few more personnel than a liquor store, but a few people at each bar in the country would add up to a lot of people. Of course, some of these bars aren't big enough to be converted, and in those cases, they might be forced to close completely or change the nature of their business. But implementing something of this nature would likely cost a lot of money up front by the government, and in this economy with the government already owing so much money, this would be an unnecessary cost.