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As of 2000, 22 states and the federal prison system operated at 100% or more of capacity.[24] Along with the "War on Drugs," other contributors to prison overcrowding include the increasing use of mandatory minimums, repeat offender ("Three Strikes You're Out") laws, truth in sentencing regulations, and decreased judicial independence. One in 11 prisoners is now serving a life sentence; one quarter of them have no option of parole.[38]

As a result of overcrowding, and prompted by the often-illusory promises of free-market effectiveness, a private prison boom has occurred over the past 15 years. This development has benefitted from the prevailing political philosophy, which disparages the effectiveness of (and even need for) governmental social programs and touts the efficiencies of private industry, despite evidence to the contrary (for example, overhead for the Medicaid and Medicare programs is dramatically lower than that for private health insurance).

The American Correctional Association is the leading trade group pushing prison privatization. Corrections Corporation of America (CCA), the GEO Group (formerly Wackenhut), Correctional Medical Services, and other for-profit companies (eg, Westinghouse, AT&T, Sprint, MCI, Smith Barney, American Express and General Electric)[39] have aggressively marketed themselves to state and local governments, primarily in rural areas, promising jobs and new income for impoverished communities .[40] As they do for other industries, these governments offer tax breaks, subsidies, and infrastructure assistance.

Rural communities, eager for outside investment in the face of declines in logging, farming, mining, and manufacturing, are enticed by the promise of new jobs and profits to be re-invested in the community. Such promises often prove ephemeral, even misleading. A 2001 study by the Bureau of Justice