The United States spends more money on higher education than any other country, and its elite institutions are the world's best. But overall, conventional wisdom says, the system is wasteful, fails too many--and is falling behind other countries. Are these criticisms fair?

The latest stinging report came late last month from a state colleges group arguing that the United States isn't producing enough college graduates, especially in science. Similar gloominess emanates from business groups and even the Obama administration, whose top education goals include leading the world again in the proportion of college graduates.

But is it really fair to try to


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