Remember all those universities and research institutions that hired and expanded in the early 2000s? Well now what do you think is happening to those researchers? Maybe we shouldn't care, I mean those institutions didn't have to expand. But this is a lousy argument in my opinion. Congress let it be known that they and by association the country cared about biomedical research (FYI: this was under a republican president). Of course the government also cares about the troops, at least when it comes to sending them overseas to fight. Once research institutions expanded and hired more scientists to make use of this additional funding, Congress changed its mind about caring. Kind of like support dries up when the troops come home. So we hired more scientists who also trained more researchers to help conduct the research. These trainees obtained PhD's and actually wanted jobs too (go figure). And the cycle continued over the short term. If you look at the number of PhD's awarded over time in the biomedical sciences, which is primarily funded by NIH, you see a large increase in the number awarded beginning around 2003. This is 5 years after the 'doubling' began, which is the average time to completion for a biomedical PhD.
The problem as you might have realized is that with the lag between the initiation of the doubling and the graduation time of PhD's, as the first round of PhD's arising from the increased funding during the doubling entered the workforce, the downturn began. Of course there was already 5 more years of researchers in the midst of their training. So we see a huge increase in the number of PhD's being conferred between 2003 and 2008, when ~8000 biomedical PhD's were conferred (remember there are ~24,000 more PhD students in years 1 - 4 still being trained).
So concomitant with reductions in funding, we were still churning out PhD's. Armchair quarterbacks will state the biomedical community should have planned for a decade plus contraction that reversed the NIH doubling and put us in a position where biomedical funding is comparatively worse than at any time in my life time. (I am not arguing absolute dollars are less, they are not, but for the number of scientists that were trained and put to work under this system, we are much much worse.) Of course if we could have predicted that, we could all fund our research programs by visiting Las Vegas every year. This would reduce a ton of paperwork.
At this point when I talk to undergraduates interested in graduate school in biomedical fields, I tell them about the problems and encourage them to think about what they want to be doing in 10 -15 years. If it's running their own labs or being in a science leadership position, then I ask if they would consider moving to a different country. They might have a chance elsewhere.