There was a big shift in the way that the mentally ill were treated, starting in the 60s and 70s. There was an acknowledgment (correct) that mental disease and disturbing and destructive behavior was not due to some traumatic incident that someone had as a child, and that sitting on a couch and talking to a psychiatrist would bring a cure (not to discount the effects that trauma and abuse as a child does contribute to, or exacerbate an underlying condition), but that just as physical disease is a result of genes, and chemical imbalances, so too is mental disease.
THAT gave governments, bureaucrats, politicians, etc. an excuse to close down mental health hospitals, throw some pills at the patients and put them on the street (we must also remember that many of those hospitals were hell holes and staff were often sick or evil themselves.
NOW we have former and potential mental patients on the street, using the gutter as a toilet, and living in cardboard boxes, until they get picked up and locked up, put back on their meds, and put back on the mean streets. This model is NOT working, and those are the ones who are more or less harmless.
WHEN we get into the kinds of mentally ill people such as Michael as the Anarchist mom described ( see at http://anarchistsoccermom.blogspot.com/2012/12/thinking-unthinkable.htm). Meds are not going to do it — they need an institution in which they can be treated, watched over, and kept from hurting themselves or others. In the outside world, they will never be able to cope and every time they drop their meds, dangers to them and others are very real.
PARENTS also have to realize when their child is that sick, that they need and should be in an institution. We all want instant gratification, and too many parents today demand from society a warm and fuzzy approach to every situation, whether it is in the best interests of the ill person or not.
SOCIETY needs to put mental health into the same category as physical health, and spend the necessary funds to care for those ill individuals, and establish institutions in which they can be "humanely" treated and live as near normal a life as possible.
HOWEVER seeing as how outraged so many folks get at the idea of even treating sick children and the elderly for physical ailments which they cannot afford treatment for, I do not hold out any hope for adding on the expense of treating the mentally ill. Our society is not prepared to be that altruistic — or even practical.