I'm going to try to control myself from responding the way I want to respond to the ignorance of this archaic statement.
You cannot, first of all, keep people institutionalized if they are not dangerous to themselves or others, and schizophrenics in treatment are highly capable of functioning outside of institutions.
People who are diagnosed as violent schizophrenics who are wards of the state ARE kept in institutions, or even in special prisons.
However, because of the cruelty and negligence of the American system, there are many people who do not get the psychiatric care they need. My Russian friend was shocked by it. He said, "why are there so many crazy people in America?"
Because he saw them walking around on the street, there to get lost, die, or kill someone else.