NOT LONG AGO, another inmate and I were standing in the compound of the federal penitentiary at Seagoville, Tex., watching "X" walk toward the gate. He was carrying a cardboard box with his belongings and was accompanied by a guard. "X" was being released.

My friend turned to me and said, "Jesus, Nick, turning 'X' loose is like setting a mad dog loose on Dallas. With that guy outside, I'll feel safer in here." We were both somewhat frightened of "X," as were most of his prison acquaintances. He always seemed on the verge of exploding.

Sure enough, two months later "X" was back behind bars, arrested for raping a stewardess and murdering her roommate.

A little later I was told that "Y" had been picked as a work-release driver by prision officials. Only the most trustworthy inmates are given those jobs; unsupervised, the drivers take other immates outside to school, to on-the-job training or to hospital appointments. But I was convinced that "Y," who was perpetually running one scam or another in prison, was a habitual criminal.

The predictable happened some months later: "Y" was arrested for dealing in counterfeit $20 bills while driving the work-release runs. Even the most strait-laced law-and-order devotee has to admire his gall -- using Bureau of Prisons vehicles to move counterfeit money around Dallas.

But there is no admiration for men like these among other prisoners. Whenever their tales hit the press, as they invariably do, other inmates cringe. It means a spate of editorials claiming that criminals are not locked up long enough. We hear again the misguided cliche that rehabilitation is impossible. Suddenlyeverybody wants to "get tough" and "stop coddling" cons.

Indeed, public opinion and the Congress now seem to believe all inmates should be treated exactly the same. The House and Senate, in fact, are moving to enact a revision of the U.S. criminal code that would prescribe strict sentencing guide-lines for judges and eliminate parole opportunities for inmates in federal prisions.

Unfortunately, this kind of push-button justice is not likely to make the streets safer for anybody or solve other problems of our penal system. On the contraray, it is likely to worsen our already appalling rates of crime and return trips to prison by creating more hardened criminals than we had to begin with.

I was a federal prisoner for almost two years. I am not "soft on crime." I believe criminals should be punished, and most inmates agree with that. But they certainly cannot swallow the idea that there are no distinctions among prisoners.

The men with whom I served time, men from maximum to minimum security installations, generally agree that 15 to 20 percent of the prison population is indeed made up of incorrigibles, those who are almost certain to commit crimes again if they are released. They may be too greedy to ever earn money the conventional way. They may enjoy the thrill of living dangerously. They may just be crimianally insane. They will not change.

But inmates also generally agree that about a third of the prison population will not be back, no matter how poorly the system is run. These are the men who are released to their families, finish school or go to a job and behave themselves. Their stories do not make the papers or influence public policy -- though there are many more of them than there are of the "X" and "Y" variety.

The remaining 45 to 50 percent could tip either way. They are the waverers -- the ones for whom the prison experience itself, their treatment by society, will largely determine which road they take.

It is now the conventional wisdom among so-called penologists that it is impossible to identify such different groups of prisoners. That's nonsense. If other prisoners can do it -- and they can -- penologist can learn to do it, too. No, it can't be done with scientific, iron-clad certainty, but then there is no such thing as "perfect justice" anyway. The point is that prisoners obviously aren't all the same, and it's ridiculous to treat them as if they were.

The wavers, for example, are usually the younger inmates, the most vulnerable, and frequently the brightest. When they arrive, most are scared to death. They talk big, but it's clear that prison frightens them so much that if they could be released after a short dose of life behind bars, they probably would never return.

You can see them turn bad after six months or so, becoming bitter and hating the establishment. They learn to act tough, because if they don't, they don't survive the drug-ridden prison experience. You can watch the more hardened criminals begin to influence them, to spin yarns of con, heists and ripoffs (most of which probably never happened).

Just as bad, these inmates, like others, quickly learn that the prison has scarcely any purpose beyond warehousing, storing bodies somewhere off the streets. Most prisoners have a relatively high IQ and are, if anything, overly endowed with energy. Numerous studies show that prisoners generally have more native intelligence than their keepers. It is not surprising that they become unbelievably frustrated doing nothing in a senseless environment.

As I learned when I was a "peer counselor" and then a "program coordinator" at Seagoville, the younger men in particular tend to want more education, job training or a way to earn money to help families. I remember a young man named Cuffey, from New Orleans.Cuffey worked hard in prison to earn the equivalent of a high school degree. He also ran the 100-yard dash in about 9.6 seconds, and some of us were trying to get him an athletic scholarship. In the meantime, we wanted to arrange for him to take some courses at a nearby school.

Sending men outside to school obviously entails some risks. But Cuffey met every requirement set by the Bureau of Prisons. There was a staff meeting, and Cuffey asked me to go with him. At the meeting Cuffey's staff counselor claimed that Cuffey didn't meet the bureau's requirements. I asked for specifics. The counselor hedged, and an argument followed. Finally, the counselor shook his finger in Cuffey's face and shouted, "I'll tell you why. Because you're a no good stupid kid, and you'll never make it. That's why."

Later this counselor gave me the real reason: "Suppose Cuffey dealt in dope out there. How do you think that would look on my record?" This was just one example of a common attitude among prison officials. As one of them once remarked to me: "There is only one name of this game -- cover your a---." So Cuffey, too, paid the penalty for the minority of prisoners who are indeed incorrigible, who help stop prison officials from considering each inmate's case on its own merits.

Cuffey was far from the only victim of the resulting warehousing. I can recall doctors picking up cigarette butts, lawyers cleaning latrines, social workers and scientists pruning flower beds, bankers and businessmen with great organizational skills mopping floors.

I have seen more intelligent, even brilliant, minds rot in prison than I care to enumerate. When I arrived at Seagoville I met a former state court judge whose mind I literally watched atrophy. I encouraged him to work on some parole cases, and once, when he didn't meet a deadline, I was short with him. He began to weep and said, "I know. I try. But I simply can't do anything anymore that requires concentration."

Warehousing is not only a source of pent-up frustration and a waste of lives and talents; it is an enormous waste for taxpayers. It costs about $15,000 a year to keep an inmate locked up, or $375 million annually for the approximately 25,000 people in federal prisons at any given time. That doesn't include amortization of an enormous physical plant and other indirect costs, which probably would double the yearly expense to almost three-quarters of a billion dollars.

What has the taxpayer gotten in return? Perhaps the worst recidivism rate in the world. Just counting those who end up back in prisons a second or third time -- not those who return to crime but aren't caught -- the repeater rate ranges from about 66 percent to 75 percent. It is a terrible indictment of a system that already keeps prisoners locked up longer for comparable crimes than any other in the civilized world.

The most basic flaw in this system is that it treats most prisoners alike -- and as if they were indeed beyond redemption. So now the "reformers" want to make this problem worse, to turn more small criminals into large ones by making sure that they no longer have any opportunity for parole, that they become more hardened and frustrated, that even more will return to crime and most likely to prison to be warehoused again at huge cost.

Democratic Rep. Robert Drinan of Massachusetts, chairman of the House subcommittee working on the criminal code revision, has suggested that judges shouldn't be deluded that prison time will "reform" an offender. It is not only peculiar for a man who is also a priest to see people as beyond redemption, but Drinan draws attention to the wrong question. The real question is whether the prison system can be redeemed, whether it can learn to consider each case separately and deal with it accordingly.

While there is little sense wasting time or money on the minority of prisoners who will always be outlaws, that doesn't mean the idea of rehabilitation for the other 80 percent should be abandoned. While the minority of habitual outlaws should not be out on parole, that doesn't mean the parole incentive should be killed for all others. Indeed, one of the chief problems at present is just the reverse -- that officials renege on parole agreements made in plea bargains, that men are held in prison for acts or accusations other than those for which they were convicted. This plays a large role in creating vengeful and distrustful ex-inmates, particularly among the young.

In effect, what the "reformers" are really asking of the penal system is more of the same. What they will likely get in return is more of the same crime. They certainly will not get safer streets.