I want to talk about two lines. These lines represent data from the Department of Education website. You nearly have to be a Ph.D in web searching to find the data, but it is there for anyone to access.
Here are the two lines. I've normalized these so in 1990 they equal 100. That allows you to see the magnitude each one has changed (click for a larger view):

One line is the average test scores for reading and math as tested by the NAEP for 17 year olds up to 2008 (the latest year I could find data). The other is the average spent by states per student per year, adjusted for inflation, up to 2008 (again, the latest year I could find data).
Care to guess which line is which? Well, here's the answer (click for a larger view):

Spending per child in public education has increased nearly 50% since 1989 after taking out inflation. In 2008, it was $12,239 per student per year. Meanwhile reading and math testing scores have remained flat. So where is all our money going?
Think about it, $12,239 per student multiplied by 25 students in a classroom is $305,975. So lets:
- Buy each kid a new laptop every year (about $25,000)
- Buy each kid $1,000 in books and materials every year ($25,000)
- Pay the teacher a very generous $150,000 in wages and benefits every year (especially for a 9-month-a-year job)
And you'd still have over $100,000 per classroom for everything else. For a school of 20 classrooms, that's $2 million per year.
Where is all the money going? It's obviously spending more money is not improving public education.
This is why I am an advocate of complete privatization of education in this country (well, in all countries). Reduce taxes the amount government takes in to pay for education and let people buy it on the open market like they buy cars/food/computers.
Most people will spend less on educating their kids than they now pay in taxes to support public schools. Schools, in order to stay in business will have to provide a good education at a reasonable price (just like any other business). There would be no more debates on creationism/evolution or political indoctrination in public schools because parents could send kids to schools that teach what the parents want them to learn. Freedom of choice, what a concept!
What could the government's role be in this? One is to keep school honest by acting as a sort of education SEC, making sure schools report accurate results. And two, government could provide vouchers for poor people who, even with their taxes cut significantly, couldn't afford private school (which I guarantee will cost less than $12,000 per year per student).