What's the long term plan for people in that situation?
If society weren't so hostile to some people, maybe they wouldn't shut off to participating in it. And even for those that don't - it makes financial sense to macroeconomically attempt to minimize the frequency of economic drop-outs but microeconomically it is much better to not just ignore the ones you have and force them on the street, because they cause a lot of property damage, which lands them in jail, where they got over a hundred thousand a year to keep imprisoned.
So economically, there has to be a recognition that some people are going to give up on the system and decide to stop trying to please a brutal economic machine, and that some of them may even become bad actors, in order to develop a realistic plan.
All the things you described (besides crack and meth) are a good start. We're missing key pieces, but your apparent solution (make their lives harder until they are driven to a slightly less bad place) is just pushing the problem onto someone else.
That's fine if you only care about your neighborhood, but it's obviously not a solution if your goal is to stabilize society.