Is the Prison Population Too Overwhelming for Taxpayers?

There is an interesting series of articles in The Economist this past week on new federal reforms to deal with the overcrowded prison population in the U.S., which is the largest in the world. “The Land of the Free has 5% of the world’s population, but 25% of its prisoners”.  Putting away ‘bad’ people behind bars seems appropriate when the crime is just, but in America this is really not the case.

Two of the three new reforms seem appropriate in that federal prisons will allow elderly prisoners that pose no real threat to society to serve shorter sentences and prisoners will be given community service and drug treatments instead of more time behind bars.  Each will ameliorate the overcrowded situation of prisons (The Economist quotes a cost of $35,000 per inmate) and allows inmates to try and rehabilitate their lives and find jobs. The third reform no longer charges drug suspects with minimum offenses based on weight of drugs involved and lets judges decide, at the time, what each offender’s punishment should be. There are two problems with this reform: unequal punishment per similar offense and a failure to alleviate the source of the actual prison problem—the criminalization of drugs.

There are many reasons why drugs should be legalized, but I am only going to touch on two main points. The first is a moral point that it is an infringement on an individual’s freedom to not allow them to do what they wish to be happy (such as drugs) so long as it does not harm anyone else. Second, and more relevant to the taxpayer, it prevents a black market and thus is invents a taxable market.

At $35,000 a prisoner and roughly 219,000 federal prisoners, half of which are drug offenders, the cost to taxpayers on not legalizing drugs and putting drug offenders in jail is $3,832,500,000 a year! Now, if we also collected tax revenue on drug sales and reduced the amount of law enforcement needed to curb illegal drug trade, it could save American taxpayers between $85,000,000,000-$90,000,000,000 a year.  This is just one of many estimates by Harvard economist, Jeffrey Miron.

So, although the reforms can help eliminate some of the burden for taxpayers, the bigger issue, and thus the bigger cost to taxpayers, lies at the American government’s discord for drugs.


4 thoughts on “Is the Prison Population Too Overwhelming for Taxpayers?

  1. Pingback: Punishment and Imagination | Economics & Institutions
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  3. From my understanding, our prison population has relatively nothing to with the welfare and safety of civilians, but all to do with profit. Private prisons have increased 1600% since the 90’s and these prisons are now making about 3 billion dollars annually. These prisons have contracts with local and state governments where they agree to operate their prisons i.e. CCA, GEO,… and in the contracts, these private corps have quotas where the prisons often must never have less than 90% occupancy. If they don’t meet these quotas these state and local governments are required to pay a “low crime tax.” This runs counter to the governments goal to have minimal crime and prisoners. These prisoners are needed because of prison labor contracts with huge private companies. “Prison laborers cost between 93 cents and $4 a day and don’t need to collect benefits, thus making them cheap employees.” Starbucks, Mcdonalds, Victoria’s Secret, Boeing, and the U.S. military all take advantage of this. Take away prison labor, GDP falls, nothing wrong with that to me, but most Americans ,especially corporate heads, wouldn’t like that.

    • Jack,

      Although private prisons have the incentive to stay in business, government prisons are operating at a loss. Costs are very high and decriminalizing certain types of current crimes, like minor drug offenses, may help curb costs. I would disagree that public prisons are not concerned about the welfare and safety of citizens. However, private prisons may be less inclined to be morally succint and more inclined to worry about being profit maximizers.


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