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Top Economists at White House Explain How Mass Incarceration Hurts the Economy

America’s out-of-control system of mass incarceration is drain on our nation’s economy, but there are ways to reduce crime and incarceration rates, members of the Brennan Center’s Economic Advisory Board said at a White House event.

April 25, 2016

Amer­ica’s out-of-control system of mass incar­cer­a­tion is a tremend­ous drain on our nation’s economy — but there are several cost-effect­ive ways to reduce crime and incar­cer­a­tion rates, members of the Bren­nan Center’s Economic Advis­ory Board said at a White House event Monday.

The discus­sion was held in collab­or­a­tion with the White House, the Economic Advis­ory Board of the Bren­nan Center for Justice at NYU School of Law, and the Amer­ican Enter­prise Insti­tute.

Video of the event is below and can be found here

The Bren­nan Center’s Economic Advis­ory Board is a bipar­tisan group of 10 top econom­ists and includes former U.S. Treas­ury Secret­ary Lawrence H. Summers and Nobel Laur­eate Joseph Stiglitz, among other profess­ors and polit­ical advisors. The group came together in Febru­ary to support the Center’s data-driven approach to ending mass incar­cer­a­tion.

Bren­nan Center Board members Douglas Holtz-Eakin and Peter Orszag joined senior admin­is­tra­tion offi­cials and experts to discuss a new report from the Pres­id­ent’s Coun­cil of Economic Advisers assess­ing the economic impact of the crim­inal justice system.

The group, includ­ing Coun­cil Chair­man Jason Furman and Senior Advisor to the Pres­id­ent Valerie Jarrett, said current policies do not make best use of limited resources. Instead, they advoc­ated for smarter poli­cing, and more job train­ing and reentry programs. Other speak­ers included Bren­nan Center Pres­id­ent Michael Wald­man, Amer­ican Enter­prise Insti­tute Pres­id­ent Arthur Brooks, Third Point LCC Founder and CEO Daniel Loeb, Center for Amer­ican Progress Director of Crim­inal Justice Policy Todd Cox, and The Econom­ist’s David Rennie, who moder­ated the discus­sion. 

“Amer­ica’s crim­inal justice system is a burden on the economy,” said Dr. Douglas Holtz-Eakin, a member of the Bren­nan Center’s Economic Advis­ory Board, pres­id­ent of the Amer­ican Action Forum, and a former economic advisor to John McCain. “Not only do taxpay­ers spend billions per year to send people to prison for far too long. This time in prison also means lost income for famil­ies and lost job prospects upon release, which create disrup­tions to our economy and labor force.” 

“The govern­ment should fund policies that are proven to work instead of fund­ing ones that don’t,” said Dr. Peter Orszag, a Bren­nan Center Economic Advis­ory Board member and the former Congres­sional Budget Office director. “The evid­ence strongly suggests certainty of punish­ment is more import­ant than its sever­ity in fight­ing crime, and that we can reduce recidiv­ism through targeted support for those exit­ing incar­cer­a­tion. So we need to devote resources to smart poli­cing, reentry programs, and treat­ment — not funnel­ing more money into longer prison sentences. There are much better ways to reduce crime while promot­ing economic oppor­tun­ity and public safety.”

“There is no ques­tion that mass incar­cer­a­tion is a drain on the Amer­ican economy,” said Inimai Chet­tiar, director of the Bren­nan Center’s Justice Program. “Today’s event shows that mass incar­cer­a­tion is not only a racial justice issue, but an economic one as well, with far-reach­ing consequences that the coun­try is only now begin­ning to under­stand.”

“Our soci­ety pays an enorm­ous mater­ial price for mass incar­cer­a­tion,” said Arthur Brooks, pres­id­ent of the Amer­ican Enter­prise Insti­tute. “It creates an enorm­ous amount of economic inef­fi­ciency. As much as it pains me as an econom­ist to admit it, this really isn’t about the money… The economic case for reform is really just a proxy for some­thing much deeper, that we talked about here today.”

The Bren­nan Center will release a study on the economic impact of the crim­inal justice system later this year. The study will include original research docu­ment­ing the impacts of the crim­inal justice system on employ­ment and the coun­try’s over­all economic health.

Members of the Bren­nan Center’s Economic Advis­ory Board will parti­cip­ate in the final analysis of that study.