The United States has the highest incarceration rate in the world: with 5% of the population it has 25% of the world's prisoners, higher than China or Russia:
http://www.bjs.gov/...
More below.
Being jailed affects both prisoners and guards for the worse. The Stanford prison experiment showed just about anyone could become tyrannical and cruel in the role of a guard bossing prisoners around, and inmates are psychologically harmed well after being released:
Stanford prison experiment
Mental effects of prison
It doesn't appear harsh punishment reduces recividism; instead countries with more humane prisons and extensive post-incarceration support show increased rehabilitation:
Sweden
This article is worth reading as a comparison between American and Danish methods:
Scandinavian approach
Yet in the United States some people still think reducing prison terms will lead to rampaging criminals running through the streets like a Hollywood dystopia -- but they would be wrong:
The United States still has the highest incarceration rate in the world, but those few states that managed to significantly reduce their prison population over the last decade saw benefits other than reduced lock-up costs. They also saw their crime rate go down at a higher rate than the national average, according to a new report from the Sentencing Project.
Fewer prisoners = less crime
This is an important result, showing it is entirely possible to have a more humane prison policy and lower crime at the same time. Indeed, the first will help bring about the second.