And you forgot a point: can they get an SSL root certificate signed for them, in order to perform MitM attacks on seemingly secured connections? Here again it's a foregone conclusion, several less technically-savvy countries have been caught doing that.

Yes, that is a good point that I forgot. I tend to assume the answer is "yes".

Can they take control of an MS-Windows PC without the cooperation of my router maker and my firewall maker? And what does it cost them to do so for the different makers?

You know? I'm fairly sure they can, after all if some kiddy off the internet can what are the chances they can't. But what's the cost to cover the different profiles? Is there a single point of failure?

For 2. I think it's safe to assume that they know a few tricks that we don't. Probably enough to hasten breaking encryption, but probably not enough to make encryption useless.

For 3. Yes, isn't that obvious?

Here's a recent discovery regarding FPGA's, maybe not the NSA, but it didn't get there by accident. http://www.cl.cam.ac.uk/~sps32/sec_news.html

I suspect that some bugs like this one in Intel networking chips may not be bugs http://blog.krisk.org/2013/02/packets-of-death.html

If it is technically feasible, then it is almost certainly being done.

D'oh... yes, of course, that's what I meant to say. Sorry, too much on my mind right now!

There are highly skilled and better financed tech companies with huge R&D teams. Why would the NSA be able to outperform them?

It's more likely their power is their access to the latest zero-day exploits via sourcing information - something they are extremely good at.

More to the point, they don't (presumably) have some secret pipeline of highly talented people. I mean, the pool of graduates in mathematics, statistics, computer science, etc., year in and year out, is available to everyone, NSA, other public sector, other private sector, etc. And while the NSA probably prioritizes hiring brilliant math wonks and what-not, so do wall street hedge fund companies, tech companies, etc. And given that at least some small percentage of "really smart people" would probably refuse to work for the NSA just on ideological grounds, I don't see any reason to believe that they have a monopoly on smart people who can do crypto research and what-not.

As for their financing, however... I don't know. I'm not real big on conspiracy theories, but I don't doubt the existence of secret budgets and "off the books" stuff to fund certain government programs. I mean, just go back to the Iran/Contra affair[1] and you can see that some sneaky stuff does go on, at least on occasion.

[1]: http://en.wikipedia.org/wiki/Iran%E2%80%93Contra_affair

[1]Projected US Gov't R&D spending - 2012: http://www.battelle.org/media/press-releases/battelle-r-d-ma...)

Unlikely. And given the secrecy surrounding their budgets, how could you know for sure? Even if you did, the dollars themselves are only part of the picture. The dynamic surrounding the money also has a big influence on how it can be used. A private company needing to post a profit operates under a set of constraints that are dramatically different from those that govern R&D in the military.

Also, unlike private R&D teams, the military can unilaterally classify and restrict entirely categories of hardware (e.g. GPS units that function over specific altitudes or above certain velocities). And they can seize (in secret) any instances that threaten national security.

That's a set of competitive advantages that the private sector, almost by definition, can never hope to match. Or at least not independently.

I think the chance of it containing a backdoor is low, though. It's been reviewed by any number of top kernel developers since it was published.