That having been said, the space agency has been dying a slow death ever since the end of the Cold War, as various watchdog groups each make their small cut and watch NASA hemmorhage.
Funding levels aren't really a problem. If you ramped NASA up to $150 billion/year, cost per pound to orbit would actually increase (due to increased competition for shuttle payload capacity).
The real problem is that NASA has no Congressional mandate, and no internal leadership, for developing better launch vehicles. Instead, they have built a massive, entrenched bureaucracy dedicated to the shuttle. NASA leadership sees improved launch vehicles as a deadly threat to their shuttle funding, and stops at nothing to eliminate them.
I agree wholeheartedly regarding NASA selling off its shuttle fleet.
Absent a major disaster, massive Congressional focus, or being sputniked, that will never happen. Decommissioning the fleet would kick hundreds (thousands?) of NASA and subcontractor managers out of their quiet, stable, predictable 40 hour/week jobs where they execute handbook solutions for solved problems. It would throw them into the hideous turmoil of engineering research and development, where they would fail miserably at everything they tried. Designing a new system takes much more skill than merely building the existing system to regurgitated specifications.
I suspect they would be decommissioned rather quickly and replaced by something like the more cost-effective Delta Clipper.
Remember your history. The entrenched shuttle bureaucracy and contractors did everything they could to bury the program. Even when the DC-X functional one-third-scale prototype was built and working, they persisted in fighting it and nearly got it cancelled. When that didn't work, they got the project transferred to NASA and destroyed the prototype. (Officially, the DC-X loss was an 'accident', but you can be sure there was great relief and rejoicing in the shuttle program.)
The only way I see to kill the shuttle is to develop an entirely private launch vehicle that is cheaper, make a big stink in the press about how much cheaper it is than the shuttle, and get the shuttle proxmired.
I don't want the world, I just want your half.
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