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not entirely government funded, but enough that, if they withdraw funding, it would totally collapse.
the entire argument that “private companies do it cheaper” is mostly because they cut corners, skirt regulations, and screw over employees to do business on the cheap. then, we find out there may be massive security breaches like, oh, chatting with Putin and god knows who else...
Part of the problem is nasa seems to be very risk adverse now. Letting private companies take the risk is one way to get around that. I'm just glad we don't have to depend on russia to get to space or the iss.
Don't forget potentially underpay people. I don't believe that's happening for SpaceX specifically, but it does for many other competitors to government jobs. Government jobs aren't necessarily super high pay, but they usually have solid pay with excellent benefits, pension, and work/life balance.
So when jobs move from the public to private sector, it often comes at the cost of employees. And in some extreme cases, employees are paid so little that they have to rely on government benefits to get by, which is extremely dumb. That's subsidizing the private sector.
From what I've heard it's true. If you have a job offer from NASA and one from SpaceX, the NASA one is better.