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Privatized prisons have a checkered history in the United States. The theory is that private, for-profit corporations can incarcerate felons at a cheaper rate than public institutions. As you will see, cost is very important but before you jump on the private bandwagon there are other considerations. A disclaimer at the outset: I have worked in both state and Federal corrections. I have no direct experience in private corrections but have worked with inmates who were housed in private prisons at some point. My work in public prisons is also offset by my belief in smaller government and that the private sector can usually accomplish a given task more efficiently and more cost effectively than government.

Bureau of Justice Statistics
First, some basic statistics from the Bureau of Justice Statistics Report, "Prison Inmates at Mid-Year 2007". This report, published in June 2008, says that the total population of prison inmates in the United States is 1,391,261. This includes Federal, state, and private prisons. Of that total by mid-year 2007, there were 118,239 prisoners in privately operated facilities, up 5.4% from mid year 2006. This means that about 8.5% of the inmates are held in private prisons nationwide.(1)

A quick perusal through the literature available on this subject reveals two strongly opposing points view. The American Federation of State, County and Municipal Employees (AFSCME), AFL - CIO, is the union that represents correctional employees who work at government facilities. The private viewpoint is held by the corporations running private prisons and groups like the Reason Public Policy Institute (RPPI), the think tank run by the Reason Foundation. In its own words "Reason Public Policy Institute is a nonpartisan public policy think tank promoting choice, competition, and a dynamic market economy as the foundation for human dignity and progress."

Private Prison Advocates
As one would guess, private prisons have a distinctly different opinion from the AFSCME. From Wikipedia (2), "Private companies in the United States operate 264 correctional facilities. Companies operating such facilities include the Corrections Corporation of America, the GEO Group, Inc, Cornell Companies, and Community Education Centers." Private corrections companies are a Wall Street growth industry. Using Corrections Corporation of America (CXW) as an example, it has five analysts' ratings as a strong buy. The company's financial report reveals an income of $134.9 million over

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