Shakespeare's famous phrase—alcohol "increases desire, but takes away opportunity"—is also quite accurate from a medical point of view. The mechanism is well studied in the clinical literature.
The effect of small doses In small doses, alcohol does indeed reduce social inhibition and anxiety, which subjectively creates a feeling of increased desire - this is the effect of psychological, not physiological, stimulation.
Physiological interference Alcohol is a central nervous system depressant — an erection requires precise nerve signaling from the brain to the blood vessels, which alcohol directly disrupts. It also constricts blood vessels and reduces the immediate level of testosterone in the blood.
Dose-dependent effects Studies show a U-shaped relationship—moderate consumption may have minimal effects, while high doses (more than a few drinks) can significantly increase the likelihood of temporary erectile dysfunction (popularly known as “whiskey sickness”).
Long-term effects of chronic use Long-term, heavy use can cause permanent damage — liver damage alters hormone metabolism, nervous system damage (alcoholic neuropathy) impairs genital sensitivity, and chronic alcoholism is associated with low testosterone on a permanent basis.
Effects on Women Alcohol also reduces lubrication and the ability to achieve orgasm in women, although this has been less studied than the effects in men.
Practical advice If you're getting ready for an intimate moment, avoiding more than 1-2 drinks significantly reduces the risk of temporary dysfunction — and if this problem becomes frequent, it's worth reviewing your overall alcohol consumption with your doctor.