So what can actually be done? Simply adding more funding won't change the grad student -> post doc -> tenured professor system.
If Profs could no longer benefit directly from the labor of grad students, in the manner that teachers don't directly benefit from the work of students, then academia would be less inclined to churn them out. Supply would go down and both average quality and salaries would go up.
What if there's a limited social capacity to do science? As in, at any given time there's it's only worth it to allow some percentage of people to do science (and not all of them will be doing science). Throwing more money at the problem will only muddy the waters by drowning out the good voices with junk, and what you will see is thousands of journals, and more fraud and bad science percolating through the upper journals. Hmm...
but "more fraud and bad science" seems (to me) to be excaerbated by increased pressure for limited funding, rather than the opposite.