I'm going to propose a radical idea here: our education system is not underfunded. It's poorly funded.
There is a sizable contingent that believes the surest way to increase the quality of education in American schools is to increase teacher salaries. The thinking goes that if a teacher's pay is on the same scale as a lawyer's or a doctor's, then a greater percentage of intelligent, capable people with gravitate to the field and students will be the beneficiaries.
With all due respect to the fine men and women who are genuinely gifted educators (and I was lucky enough to learn from a couple myself), this notion fundamentally misunderstands the forces already at work to determine teacher's salaries and misjudges the relationship between a good teacher and good students. Furthermore, it ignores the fact that students, parents, schools, and governments across the country have no idea what a good teacher is actually worth, or even what constitutes a good teacher to begin with.
Some will contend that a good teacher is invaluable. Ridiculous. Any individual who trades a skill or commodity in a marketplace has a value determined by the rarity of the skill or commodity and the desire of the potential customer - in short, by supply and demand. Determining that value is far more difficult when outside forces interfere with the functions of the market. In this instance, the primary culprits are teachers' unions, whose primary motivation for decades has been to secure greater pay and benefits for their members, even at the expense of school districts' budgets. By artificially driving up prices across the board, rather than allowing the market to determine the value of each individual educator, teachers' unions are interfering with the only mechanism truly capable of identifying what good educators are worth.
The qualifier "good" is particularly important in this case, as a more market-like system would inevitably result in some teachers receiving significantly higher compensation than others, even within the same school. Unions would cry foul, of course, but this is how individuals' value is determined in every other sector of the American economy. Everyone brings a certain set of competencies and experience to the table, and they are compensated accordingly by organizations that can benefit from the application of those competencies. Why should educators be any different? And if the market were allowed to determine the value of a good teacher, and if compensation reflected this value, then the result would be not only a wider range of salary between good and bad teachers, but also a greater incentive for bad teachers to improve themselves, and for good teachers to maintain a high level of performance. It would be as if they were - gasp! - employees!
I believe that the market is the only tool that can properly determine the value of a good teacher, with one condition: we must determine what constitutes a good teacher. This, I believe, is the single biggest challenge facing the American education system, and one few people seem to ready to acknowledge. In a country of 300 million people in vastly different economic and social situations, how does one establish a baseline for what an educator should be? Test scores are insufficient - tests are easy to game, easy to teach to, and reflect neither creativity nor lateral thinking (with a few exceptions). Nor can we rely on intangibles - teachers who will make students feel good, who "inspire" them, Dead Poets' Society-style, but without corresponding results.