I have a feeling that you're equating a PhD with a Master's or Bachelor's degree. The ultimate goal of a PhD is to prepare you to do 'real research' in that you're trained to collaborate with academics, dig through academic materials, compile results, and ultimately add to the knowledge of mankind. This is fundamentally different from a BS or MS. Replacing the academic setting for this, in my opinion, would be suboptimal, if not detrimental. This is academia in its purest form almost...basically what it was originally intended to do! Not train people for the job market, but to further the actual academic studies of everything!
What you're forgetting is that if there are a ton of hungry PhD's running around looking for work where your Joe-Master's Degree or Jim-Bachelor's Degrees are looking for work, chances are they may displace quite a few of those guys if they look to enter the standard work force. Not because a PhD makes one inherently better, but because it seems like so many employers look at paper qualifications, and actually a lot of PhD's did work REALLY HARD to get their PhD...so at least they've shown they can work really hard on something and come up with a contribution.
Also, government budget cuts never seem to affect military research, where a TON of research dollars stems from. I have a feeling that the government will get its house in order without massive research spending cuts.
What you're forgetting is that if there are a ton of hungry PhD's running around looking for work where your Joe-Master's Degree or Jim-Bachelor's Degrees are looking for work, chances are they may displace quite a few of those guys if they look to enter the standard work force. Not because a PhD makes one inherently better, but because it seems like so many employers look at paper qualifications, and actually a lot of PhD's did work REALLY HARD to get their PhD...so at least they've shown they can work really hard on something and come up with a contribution.
Also, government budget cuts never seem to affect military research, where a TON of research dollars stems from. I have a feeling that the government will get its house in order without massive research spending cuts.