Private Prisons: Cost Saver of Tax Waster

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Private Prisons: Cost Saver or Tax Waster? Private Prisons: Cost Saver or Tax Waster? Federal, state, and local governments have for years, been contracting out some of the duties and responsibilities that have historically been performed by government employees. Most Americans would probably not be surprised to learn that people working at the Department of Motor Vehicles work for a private company contracted to perform that function. Just as food service at sports arenas and airports is under contract by private companies, many jobs within all levels of government are also contract operations. But what might surprise many is that private companies such as Wackenhut, Corrections Corporation of America, and Cornell Corrections are being contracted by federal, state, and local governments to run some existing prison and jail facilities as well as build, manage, and run others. Are these companies doing this out of the goodness of their heart? Did the Chief Executive Officer of Wachenhut wake up one morning and decide to go into the corrections business as a charity for government? Of course, this is not the case. These companies are for-profit companies with nothing but profit and the bottom line in mind. The amount of profit depends on how much the contract pays as opposed to how much of that money is spent on salaries, facilities, security, and training. The less output, the greater the profit. Governments have always justified such contracting as a means of saving taxpayer dollars and private prisons have historically been able to operate on less money thus saving taxpayer dollars. Is this still the case? Over the past few years, it has become obvious that the days of private prisons contracting to do the same job at a cheaper rate are behind us and it is increasingly clear that these companies are in this business to make a profit, increasing the
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