An article in the New York Times states:

The United States has a long history of separating the treatment of mental and physical illnesses, dating back to the days when the severely mentally ill were put in poorhouses, jails and, later, public asylums. That ended after the deinstitutionalization movement of the 1960s, but mental health experts and advocates say that the delivery of services is still far from equal, because emotional illness is still not considered to be on a par with medical illness.

(emphasis mine)

Now, we just put the mentally ill in jails. Again:

The report, Jailing Communities: The Impact of Jail Expansion and Effective Public Safety Strategies, found jail population growth (22 percent), is having serious consequences for communities that are now paying tens of billions yearly to sustain jails. Jails are filled with people with drug addictions, the homeless and people charged with immigration offenses. The report concludes that jails have become the “new asylums,” with six out of 10 people in jail living with a mental illness.

What the New York Times article fails to mention is that the deinstitutionalization movement of the 60s planned for people to receive mental health care in outpatient settings, not for them to get no mental health care at all. But in the frenzy to “cut wasteful spending” in the Reagan years, mental health funding was often the first to go. And homelessness began to become the crisis it is today.