If you have a million dollars to spend, you'll be careful and pay attention; if you have a billion, you'll be looking at crude aggregate metrics.
In my country the R&D budget is quite small in the first place, and there were huge cuts during the 2008 crisis.
The result of the cuts was mainly that the mafias, old researchers with political influence, and people who are experts in gaming the system got to keep their funding. In general, newcomers, young researchers, and genuinely good researchers who aren't that good at gaming the system suffered the most.
No, the truth is that these problems are caused precisely by the insane levels of competitiveness for funding - and solutions must reduce that level of competitiveness for funding, not increase it.
Let scientists among themselves figure out who is brilliant. If the system gets corrupted, a second group of scientists will emerge who claim to be the real deal. Let them battle it out and choose the smarter group for further funding.
In other words, do it the way it was done before the influx of the administrative overhead.
Would this involve an application? Perhaps a committee?
Edit: Hmm, seems I plagiarised https://xkcd.com/481/, but worse. I'm glad I rarely write the first thing that comes into my head.
That second group cannot emerge if it does not have funding. Einstein was 'lucky' in that he had his job as a patent clerk that allowed him his theoretical studies until he finally found his way into an acedemic career.
Honestly, the early phases would be pretty much the same. There would be researchers who want grants to do experiments and to get the grants they would need to impress boards of their peers. So basically the system we have today.
This is the only strategy, in my opinion, that makes sense. Every year, a certain fraction of the grant money from NSF/NIH/DOE will be awarded randomly, based on a lottery. Your name is automatically entered into the lottery if you submitted a grant proposal. The money per random grant will be constant; there will be no strings attached to the budget regarding scientific direction.
Sometimes it feels as if the current system we have in the US is the worst ever devised for solving the "long-term research" problem --- that is, except for all the other systems that have been tried in the past.
How do we, as a society, do better by scientists pursuing research that could take many years or decades to pay off?