Here's another interesting detailing of the for profit prison system.............
The American prison system is massive. So massive that its estimated turnover of
$74 billion eclipses the GDP of
133 nations. What is perhaps most unsettling about this fun fact is that it is the American taxpayer who foots the bill, and is increasingly padding the pockets of publicly traded corporations like Corrections Corporation of America and GEO Group. Combined both companies generated over
$2.53 billion in revenue in 2012, and represent more than half of the private prison business.
So what exactly makes the business of incarcerating Americans so lucrative?
Most of it has to do with the way the American legal system works, and how it has changed over the last 40 years. In the 1970’s, lawmakers were dealing with a nationwide rash of drug-use and crime. By declaring a nation-wide war on drugs in 1971, President Richard Nixon set a precedent for hard-line policies towards drug-related crime. New York governor Nelson Rockefeller followed suit declaring “For drug pushing, life sentence, no parole, no probation.” His policies once put into action promised
15 years to life in prison for drug users and dealers. His policies catalyzed the growth of a colossal corrections system that currently houses an estimated
2.2 million inmates.
The runaway growth of US corrections did not come overnight, and did not come from the government alone. Since the
1970’s federal and state correction agencies have consistently struggled to meet the increased demands brought on by the
US Department of Justice and strict drug laws. In 1982, three Texas businessmen, Tom Beasley, John Ferguson, and Don Hutto saw an opportunity in the shortcomings of the Texas corrections system’s inability to deal with this influx of incarcerations. They devised and executed a plan to secure the first government contract to design, build, and operate a corrections facility from the Immigration and Naturalization Service and the Texas Department of Justice.
CCA operates the fifth largest prison system, public or private, in the system in the US. Under its control include
51 owned-and-operated facilities in
16 states and contracted management of
18 more state-owned facilities in
7 states. This network allows CCA to maintain a
44% stake in the
$7.4 billion private corrections market for a market cap of
$3.53 billion. All of this equates to a massively profitable operation for CCA who recorded
$1.64 billion in revenue,
$883.1 million of which came from state governments in 2012.
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The Economics of the American Prison System | SmartAssetSmartAsset Blog