The source of all of NASA's problems:

I saw today that NASA announced the grounding of all future space shuttle flights. Some may debate whether or not this is necessary, though honestly, I can't say why the number of doubters would be all that high, or, for that matter, why the question of the space shuttle would be all that relevant. The problem and solution are both simple in principle, and complicated but doable in fact.

The solution began to be achieved through a simple yet elegant competition, the Ansari X Prize. On May 16, 1996, a competition was announced to create the first craft, fully funded and designed by non-governmental means, to have the capacity to carry 3 people or the weight equivalent into sub-orbital space (defined as an altitude of 100 km or greater) on two consecutive flights in two weeks, using the same craft. The competition was a winner-take-all event, with US$10 million going to the winner. On October 4, 2004, just over 8 years after the prize's creation was announced, Scaled Composites LLC, led by Burt Rutan and Microsoft co-founder and billionaire Paul Allen, achieved that second consecutive successful flight with several days to spare within that 2 week window. Also, several other teams from several points around the globe were not far behind, with one of the more intriguing ideas coming from Romania. And while the prize was $10 million, the estimated costs (I'm working from almost a year's memory, so forgive me if the figures are inexact) were around double that, still a bargain compared to the cost of government-sponsored spaceflight.

Given the success of the Ansari X Prize and other aeronautical design and flight competitions in the past, I think the solution is obvious. Set a groundbreaking goal; set aside a significant amount of money as a reward for the successful achievement of the goal; and may the best company win. We've all seen what happens when research and development are left to governments: 30 year old designs without a credible replacement near testing, let alone completion. We as a world are capable of far better, and we should demand better.