For "Stupid in America," a special report ABC will air Friday, we gave identical tests to high school students in New Jersey and in Belgium. The Belgian kids cleaned the American kids' clocks. The Belgian kids called the American students "stupid."

We didn't pick smart kids to test in Europe and dumb kids in the United States. The American students attend an above-average school in New Jersey, and New Jersey's kids have test scores that are above average for America.

The American boy who got the highest score told me: "I'm shocked, 'cause it just shows how advanced they are compared to us."

The Belgians did better because their schools are better. At age ten, American students take an international test and score well above the international average. But by age fifteen, when students from forty countries are tested, the Americans place twenty-fifth. The longer kids stay in American schools, the worse they do in international competition. They do worse than kids from countries that spend much less money on education.

This should come as no surprise once you remember that public education in the USA is a government monopoly. Don't like your public school? Tough. The school is terrible? Tough. Your taxes fund that school regardless of whether it's good or bad. That's why government monopolies routinely fail their customers. Union-dominated monopolies are even worse.

In New York City, it's "just about impossible" to fire a bad teacher, says schools chancellor Joel Klein. The new union contract offers slight relief, but it's still about 200 pages of bureaucracy. "We tolerate mediocrity," said Klein, because "people get paid the same, whether they're outstanding, average, or way below average." One teacher sent sexually oriented emails to "Cutie 101," his sixteen year old student. Klein couldn't fire him for years, "He hasn't taught, but we have had to pay him, because that's what's required under the contract."

They've paid him more than $300,000, and only after 6 years of litigation were they able to fire him. Klein employs dozens of teachers who he's afraid to let near the kids, so he has them sit in what they call "rubber rooms." This year he will spend twenty million dollars to warehouse teachers in five rubber rooms. It's an alternative to firing them. In the last four years, only two teachers out of 80,000 were fired for incompetence.

When I confronted Union president Randi Weingarten about that, she said, "they [the NYC school board] just don't want to do the work that's entailed." But the "work that's entailed" is so onerous that most principals just give up, or get bad teachers to transfer to another school. They even have a name for it: "the dance of the lemons."

The inability to fire the bad and reward the good is the biggest reason schools fail the kids. Lack of money is often cited the reason schools fail, but America doubled per pupil spending, adjusting for inflation, over the last 30 years. Test scores and graduation rates stayed flat. New York City now spends an extraordinary $11,000 per student. That's $220,000 for a classroom of twenty kids. Couldn't you hire two or three excellent teachers and do a better job with $220,000?

Only a monopoly can spend that much money and still fail the kids.

The U.S. Postal Service couldn't get it there overnight. But once others were allowed to compete, Federal Express, United Parcel, and others suddenly could get it there overnight. Now even the post office does it (sometimes). Competition inspires people to do what we didn't think we could do.

If people got to choose their kids' school, education options would be endless. There could soon be technology schools, cheap Wal-Mart-like schools, virtual schools where you learn at home on your computer, sports schools, music schools, schools that go all year, schools with uniforms, schools that open early and keep kids later, and, who knows? If there were competition, all kinds of new ideas would bloom.

This already happens overseas. In Belgium, for example, the government funds education—at any school—but if the school can't attract students, it goes out of business. Belgian school principal Kaat Vandensavel told us she works hard to impress parents. "If we don't offer them what they want for their child, they won't come to our school." She constantly improves the teaching, "You can't afford ten teachers out of 160 that don't do their work, because the clients will know, and won't come to you again."

"That's normal in Western Europe," Harvard economist Caroline Hoxby told me. "If schools don't perform well, a parent would never be trapped in that school in the same way you could be trapped in the U.S."

Last week, Florida's Supreme Court shut down "opportunity scholarships," Florida's small attempt at competition. Public money can't be spent on private schools, said the court, because the state constitution commands the funding only of "uniform, . . . high-quality" schools. But government schools are neither uniform nor high-quality, and without competition, no new teaching plan or No Child Left Behind law will get the monopoly to serve its customers well.

A Gallup Poll survey shows 76 percent of Americans are either completely or somewhat satisfied with their kids' public school, but that's only because they don't know what their kids are missing. Without competition, unlike Belgian parents, they don't know what their kids might have had.