In 1971 President Nixon declared “drug abuse” as public enemy number one.
This marked the start of the war on drugs. Since, prison populations surged.
Prisons couldn’t keep up with new inmates flowing in. Space was limited.
In 1980 privately owned prisons emerged. The government began outsourcing prisoner control. And the for-profit prison industry took root.
Investors could then profit from more folks in prison… And they have.
Corrections Corporation of America (CXW) and The GEO Group (GEO) are publicly owned businesses. Both multi-billion dollar firms. They profit by keeping prisons full.
Today the U.S. has the highest prison population. You can see in the chart below that China is the runner-up…
The U.S. has under 5% of the world’s population but the most prisoners. It’s out of hand.
The U.S. government now spends over $80 billion on prisons. That’s up over 4,100% since the start of the war on drugs.
The chart below shows the government’s annual prison expense.
The government is flush with cash… when it needs to be. Private lobbying keeps many bloated government programs running.
Special interest groups protect their revenue streams by prodding government officials. And in return, the officials often receive kickbacks and other perks.
Paying attention to lobbying and regulation is crucial. New laws and regulation can make or break investors.
We’re not here to argue the morals. We just follow the money. When you’ve saved and multiplied your savings, you can choose what causes are most worthy.