[mcguire]

(D)ARPA developed the research behind the Internet and GPS. Private venture capital gave us Facebook. Are you sure you want to make this argument?

Venture capital funding is a great way for product research and development to be outsourced---nobody is going to notice if the project fails but if it doesn't there is money to be had. Near-basic research has an extremely long time horizon (internet research started in the 1970s and didn't become publicly useful until the 1990s) and may never be profitable. Further, nobody wants the results of a long term research project until they already have it and can see the utility.