One of the only votes Ron Paul has ever voted "Yes" to that involves spending for something not specifically called for in the Constitution was a vote for NASA funding.
Though he claims that that vote had to do with NASA's role in defense.
I'd say Ron Paul as a president would roll NASA's defense capabilities in with military spending and leave things open otherwise to the free market. (total conjecture though)
I worked at NASA for a while. They had had their funding gutted about 90% and had gone through mass layoffs. So yes, they are really underfunded.
They also do a lot of defense related work. The project I worked on had to do with a constellation of communication satellites, and of the channels supported, at least 40% of them were classified. The office next to mine was a SCIF that got swept before every meeting...
In some ways, the shuttle is a glorified service station - you can't exactly bring a satellite back to earth is it needs a little maintenance...
As to costs, and the people here bashing the science aspects - what's so expensive is getting the payload into orbit in the first place. The cost of the science is chump change, by comparison.
Private industry is already taking over aspects here. Companies launching satellites will buy a launch vehicle from Locked-Martin or a similar company to put their birds into orbit. One company, COMSAT, was created by the government in 1963 and completely spun off to private industry. It hasn't faired so well, in recent years, but I used to work there too - back when COMSAT Labs was still in Clarksburg. It is an example of how government can go private in a good way.
The USPS is kind of in the middle here, as it's part government agency and part civilian company.
Some examples of how privatization is disastrous would be the recent trend to privatize aspects of how the government does business. NTIS comes to mind, which is a clearing house for government scientific and technical data. Here we have a fantastic resource of data that in theory belongs to the US Public as we paid for all that research, but it's priced so high that only corporations can afford it. If you need something that they might have, pray that DTIC hasn't released it to NTIS, as from DTIC you can file a FOIA and get the first 100 pages free and the rest will be 10 cents a page. That's a lot better than $30 for a 18 page report...
In other cases, "technology transfer" or the licensing materials produced at public expense are forms of corporate welfare. Their effect is to take what belongs to all of us and keep it out of the publics hands. A couple of examples: do a patent search on N-GRAMS, a very useful tool, but the company the gvmt patent was transfered to is not making it available to the public, only incorporating it in very special purpose machines that ordinary people can't afford. Another would be the state department language tapes that are supposed to be excellent, but the company they were given to has priced them much higher than any other language courses so only corporations can afford them. Another was an algorithm developed to detect change between one aerial photograph and another of the same area taken later - it's now being used for detecting and monitoring breast cancer, but might have other applications. Applications that won't be developed, because one company has a loch on the technology - despite that it was developed on the public dime and is our property - in theory...
anyway, I'm getting a bit off topic, or am I...
-n