The United States prison system has a long history, from to the Walnut Street Jail to the Massachusetts’ Castle Island Penitentiary, which was essentially a mimic of the English workhouses, to federal-run and private prisons we have today. When the word “prison” is mentioned, there is usually an association with the words: murder, rape, drugs, robbery, and gangs. One important word that doesn’t come into mind is “economy." The important correlation that economy has with prison is that imprisonment changes the aggregate output of the nation due to unemployment of ex-convicts and has led to an increasing amount of taxpayer money being spent on prisons. There is little awareness regarding the link between the two. Excess expenditure is being spent on incarceration and despite their efforts, states are struggling to keep the rates down. Although there are some negative aspects of increased imprisonment, there is a positive side in which the rising numbers of incarcerations alters the economy by creating more jobs in the correctional sector of the economy. The constantly surging rate of imprisonment impacts the economy in terms of expenditure and output. Prisons, originally called “house of detention”, locked up political prisoners, and prisoners of war.1 They have changed to become a “house” of punishment for those who disobey the law. The prison system is designed to keep violent criminals away from the public for the wellbeing of the people. During the turn of the century, there has been a sharp increase in the amount of people placed into the system. “Almost 12 million people cycle through local jails each year.”2 We can now see in the year 2014 that “prisons in 17 states are over capacity...the prisons will return to its long-term trend toward growth.”3 The government has the largest investment in the prison industry. Not only are there government-run facilities, there are also private companies that run the national prisons. The private prison industry, in fact, is worth $22.7 billion.4 The high rates of incarceration account for the size of the prison industry. With the large prison system, mass incarceration has led to an increased amount of taxpayer money being spent. Imprisonment rates are extremely high and are still increasing in different states all over the nation and federal and state government expenditure is off the charts. Most of the money is going towards “employee benefits, capital costs, in-prison education services, or hospital care for inmates.”5 The total taxpayer cost of prisons is higher than the cost reflected in combined corrections budgets in each state by 13.9%.6 The amount that is spent on the corrections sector has nearly quadrupled. The prison system is in fact so large that in 2006, the United States actually had an approximate 25% of all prisoners in t