Skizz-
I agree with most of what you're saying, but I'm not convinced the dollar amounts spent on education need to be increased. If you compare how much we spend per student with other countries that are out-performing us (depending on what standard you use, of course, and how many students you test and at what levels), I'm pretty sure we're ahead in dollars spent per student. To be fair, I think that none of the suggestions put forth by conservatives/republicans are good, either, but there's enough depth to the problem that simply throwing money at it is not going to be the solution.
I almost shudder typing that because I do believe that many essential programs in education are underfunded, and it pains me that so many programs get cut due to lack of funding.
So the question basically is this: if our dollars spent per student is so high, but so many essential programs (like arts, music, theatre, phy ed, sports, even social studies) are cut due to underfunding, where is all the money going? If you look to teachers or teachers unions as the problem, quite frankly I think you're high (and Skizz, I know you don't do that). Certainly there are problems in some unions and with some teachers, particularly in much larger districts, but as a whole my experience has shown that teachers and teachers unions do work.
I do think teachers should get paid more. I think this attracts more talent and people who would otherwise have more financially lucrative careers. I do think tying teachers' pay to test scores is misguided and even potentially dangerous. How does a music teacher, for example, increase his or her pay when their subject isn't included on any standardized exam? This doesn't even begin to touch on the inherent problems of standardized testing in the first place. Also, it's possible that the most experienced teachers would use their seniority to procure classes with the best students in order to continue getting raises. That leaves the younger, less experienced teachers to teach the students who struggle, and frankly, in most cases they'll continue to struggle because often (not always) experience does breed competence.
Again, where is the money going? Frankly, I think there's too much administration and too much money spent on pooly conceived initiatives (No Child Left Behind, anybody?). Spend money to hire, retain, and train good, well-trained, dedicated teachers, and let them teach and make sure they have what they need to do their job to the best of their ability.
There's more to the problem than that, of course. I think part of it is cultural and cannot be fixed through the educational system. You look at countries who outperform us (again, based on standardized testing), and it does seem as though education is more highly valued in those cultures than in ours. Why that is, I'm not sure. Perhaps because America was at the top of the world, so to speak, until recently, and we've grown complacent? Other countries still have a hunger to improve? Who knows.
Also, I do believe that the US educates a wider array of its populace than other countries do. Many other Western countries get non-college-bound students into vocational training earlier. There are pros and cons to this, but ultimately it means that our schools are often preparing students for paths they won't ever go down, and this is on both sides of the coin. On the upside, it also probably means that we put out more well-rounded students, even if they underperform in key areas.