The taxpayer had no say in whether he wanted his money stolen so that some other guys can decide who can waste much of it. I was making it clear that this is nothing like a VC model, which is voluntary. If we were to make the comparison, it would be that people could chose themselves what research, if any, to fund.
The issue with panels allocating taxpayer money, is that their interest is still in government. That is, they will fund research in which government has an interest or is neutral, and consequently, any research which is potentially harmful to government is scrapped (even if it would be beneficial to the taxpayer.)
One might not think there's a distinction between what benefits the government and what benefits the taxpayer if one believes in the fairy tale that governments exist to benefit the people.