system
Given the following post, respond as if you're commenting on Reddit:
human
For Profit Prisons

How do they work? Is it entirely private, or does the government still cover some of the costs? Why are some prisons privatized while others aren't?
gpt
Lets say the Townsville government is looking at it's budget - it's spending $50 Million a year on prisons! Well, ACME Prisons, Inc. comes to the Townsville treasure and says:  

 "Listen - pay us $40 Million and we will take care of the prisons"

It makes complete sense financially to outsource this - they claim to offer the same or higher capacity prisons for a cheaper price.

Since the prison is now privatized, it will be run like any business - budget cuts, stuffing more people into each room because they can having more prisoners yields a higher profit for ACME Prisons, Inc. Many times this leads to worse conditions.

The government covers all the costs; not every government has hired a company to take care of prisons for them, however.