By the way, I'm not included in "we". By "we" I mean you.
In order to reduce the prison population, we need to rethink the purpose of prisons, and we need to start to consider the MOTIVATIONS behind crimes, not just the outcomes. Not all criminals belong in prison. Putting all criminals in prison is a waste of taxpayer money, and it does not rehabilitate the criminals. Most criminals would be better put to some use - "restorative justice", if you will. They should have to make what they've done right, as much as is possible. The purpose of a prison should be to keep dangerous people off the streets. Basically, if you wouldn't be frightened to run into a person in a dark alley, that person does not belong in prison.
There are five basic reasons why people commit crimes. In my world, after a person is found guilty of a crime, she will undergo a psychiatric evaluation, as well as an evaluation with a social worker, to determine the root cause of the crime. Once the motivation for the crime has been determined, the criminal can be sentenced. I will discuss each of the criminal motivations, and how I believe they should be handled. I will singlehandedly solve this problem. You're welcome, United States.
1) Stupidity/Lack of Impulse Control
This is the guy who gets in a bar fight after he drinks too much. This is the kid who throws a brick through the principa's windshield. These aren't necessarily bad people, but they do bad things because they are stupid, or because they lack foresight. Basically, they have bad decision making skills.
They do not belong in prison.
If the crime is minor, or if it is a first time offense, the penalty should be community service. Ideally, the service should be suited to the crime - for instance, a vandal should have to clean up graffitti, etc. If the crime is a more major one, or if the criminal is a repeat offender, she should be sentenced to join the military, where she will learn self control and discipline.
Here you have your theives, your drug dealers, your prostitutes. These are people who are motivated by poverty - no one chooses these kinds of lifestyles if they feel they have better options. They do not belong in prison.
If the thievery is motivated by a drug addiction, the thief should be sentenced to a treatment center. I know - I'm not a huge fan of forced rehab either, but here's the question - do you want to reduce the prison population, or don't you? Addicts don't belong in prison. They need help for their problem, and prison definitley will not help them. Rehab might help them, even if it's forced.
If drugs are not the problem, and it's just a matter of being poor and making bad decisions to try to not be poor, then the offender should be given 90 days to either A) get a job, or B) enroll in some kind of schooling or vocational training. A social worker would be assigned to the criminal to assist them in finding resources to help them do this. If, at the end of 90 days, they have not complied, then and only then should they be sent to prison.
3) Mental Ilness
This is the guy who believes he is a dog, and so he bites the mailman.
If people are mentally ill, they cannot be held responsible for the actions they do that are caused by their mental illness. They are not in their right state of mind. They are suffering from delusions, etc. They do not belong in prison.
If the mental illness can be treated on an outpatient basis, with therapy and drugs, then the person should be given access to mental health treatments. If the illness is more severe, and the person is a true danger to herself or others, she should be placed in a psychiatric hospital.
You might say "But doesn't it violate civil rights to force a person to take drugs/receive medical care against their wishes?" Well so does putting them in prison, but no one criticizes that, because once you start committing crimes, you prove forfeit certain rights. That's why convicts can't vote, own fireams, etc. No, we should not forcibly medicate every mentally ill person, whether they like it or not. Just the ones who have proven themselves to be dangerous to others.
Here you have your corruption, your bribery, your white collar crimes. These are people who just aren't satisfied with what they have - they want more and more, and they don't care what rules they have to break to get it. It's unsavory behavior, and certainly cannot go unpunished. But they don't belong in prison, because they don't meet the "dark alley" criteria.
Instead, we need to do "restorative justice" with them. They need to refund all the money/property they gained illicitly. If that is not possible, because they spent/destroyed it or whatever, or because it is unclear who should be reimbursed, then their wages will be garnished until the full amount is paid back. If it is unclear who should be paid back, the funds will be given to charity. If they used their jobs to gain illicitly, then they should be fired from those jobs, and no longer allowed to work in that industry. In addition, they should be sentenced to community service helping the poor. Spending time in soup kitchens and slums should help them to gain some perspective, and better appreciate what they have. The amount of time spent doing community service should be proportionate to the crime committed.
These are the people who belong in prison. Here you have your child abusers, your rapists, your animal torturers, your serial killers. These are the people who are motivated by causing pain to others. They like to cause others pain. They are psychopaths and they cannot be allowed to run amock, victimizing and hurting people. Lock them up.