The argument states the crime rate has remained stable over the past 20 years. However, there is a growing proportion of the population that is incarcerated and more resources each year go towards this. The author uses this reasoning to conclude that putting more people in prison does not help to reduce the crime rate.
We can clearly see where they are coming from. If crime rate hasn't reduced but we keep putting more of the population in prison, then imprisoning isn't helping. This makes sense on the surface, however, it doesn't consider a very important factor.
What if we allowed those people to remain free? This entire prison population + the current crime rate which is the same as it was 20 years ago would surely increase the crime rate dramatically. Evidently, having these people in prison, despite not lowering the crime rate from 20 years ago does keep it stable by not allowing criminals to continue committing crimes.
This is what answer choice B is alluding to. That the crime rate was going up, but due to the increased proportion of the population in prison, it has remained stable. Therefore, incarceration has been effective in reducing the crime rate.
I hope this helps. Please let me know if you have any other questions!