system
Given the following post, respond as if you're commenting on Reddit:
human
[Kerbal Space Program] On the origin of Kerbals. Did they evolve at Kerbal Space Center?

The whole planet is uninhabited except for the Kerbal Space Center.
gpt
Considering that other civilized points no longer exists, and in career mode you're commonly given missions to explore point on your home planet, it seems that the Kerbal planet may have faced mass extinction and the collapse of society. 

Think about it: the one final bastion of civilization is the remaining buildings for a space program, experimenting in both space flight AND aviation. Why would they need both? Either aviation technology was reached and lost, or faced with possible extinction, research to escape Kerbin and see if other planets in the system can sustain life has gone into full force. 

This possibility can also be hinted at by the fact that your Kerbal astronaut supply is nigh unlimited. And their qualifications are often terrible. Complete cowards, or dumb beyond belief. Yet they willingly participate. Why? At a chance to escape. And the newfound overpopulation post-civilization keeps the supply plentiful. 

However, this doesn't address why you have a limited budget. Why limit the spending capital of kerbality's final hope? Politics mostly. But also limited world resources. Your reputation and money is always on the line, as you race to find a new home planet, and slowly away over those who, like in the real world, believe that space travel is a waste of resources. Some think that we should put that effort into rebuilding this planet. Saving our home, not abandoning it. They would rather spend money towards reclaiming the planet. But the more reputation and success you get, the more funding people will be willing to send your way.