I used to have anxiety so bad, I couldn't sleep for days at a time (3 in a row one time). My bottom lip quivered, and I could barely speak to people. Everyone goes through times when their confidence fails, some worse than others. I had it really bad. Thoughts of ending it all, self hatred, the whole nine yards.
But here is the kicker, and why I responded to your post. I firmly believe that before I used the spice, I had every doubt that I was more than a decaying bag of juice and meat. After what I witnessed the first time I went over, I started to believe that I had a spirit. After reading Tao Te Ching, the Tibettan Book of the Dead, Ashtanga Practice and Teachings, What the Bleep (Interviews), and various Deepak Chopra Titles, I am now firmly convinced that I have a spirit. I won't go into a detailed breakdown proof of why, but I believe I could prove it even logically now (especially to myself). By the sum of this, I now can't be depressed or have any anxiety that isn't generated by being attacked by someone (going on a year now - pure bliss). To understand and truly believe that the universe is one giant super intelligent force, designing us for experience and generating new spirits through the crucible of earthly bodies, makes my anxiety impossible. You have all the time in the universe, if you believe you are infinite. There can't really be anxiety or depression, only boredom, if you've gleaned certain things. Entheogens have been super chargers for my meditation practice.
So I would say certainly they should give psychedelics to people with emotional and psychological problems. Some psychologists even do give them to patients. I met a girl in college, who had serious problems resulting from an abusive mother. She was given a dose of mushrooms by her doctor (not a conventional doctor of course), and sort of forced to relive the pain and thus allowed to reprogram her response and resulting disposition. Per her, it worked and made all the difference in the world. That said, I believe it can go the other way, and LSD, Mushrooms, Peyote and DMT are all vastly different. I think long lasting stuff (i.e. LSD, Mushrooms and Peyote can really mess someone up if they are not in a good place emotionally. DMT, however, I think is safe and healing no matter what, because it quite frankly rips all of that away and takes you to your core self. Plus it only lasts 10 minutes. Another example I can think of is a girl who I saw use DMT, saying that she was forced to traverse all the weaknesses she had performed in her life, all at once. She emerged from this by saying she would never apologize again, and now possesses confidence and a cheerfulness that was not there before.
To sum it up, I'm almost convinced that DMT (not so much the slower movers like LSD and Mushrooms), is a great psychological curing device. My theory on this, is that it takes you back to spirit for a moment, almost like a child again. All of the constructs that support your ego are suspended just long enough to get a good look at them. This can help people understand, or even break down. But in my experience a breakdown is sometimes all someone needs to move on to a more healthy and carefree lifestyle, which I think is what we are all after, and then some. I think these "drugs", the entheogens, are gifts through which we get to access varying degrees and flavors of universal wisdom.
It might be worth checking out the pharmacratic inquisition:
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