This issue is familiar to Americans like me who have lived overseas and have learned the local language of another country and have read the math textbooks available there. Better instruction can produce better educational results--and for less money besides. The top student issue is illustrated also by results from the International Mathematical Olympiad[2] and other international academic competitions. The United States has a huge population base, and it has many families in which the children are brought up by parents who are first-generation immigrants who received their own primary and secondary educations in other countries. (Such children do conspicuously well in academic competitions in the United States.) And the United States is wealthy, a heritage from the good governance structure set up by the United States federal Constitution. But even at that, the United States national team can be beat at the International Mathematical Olympiad by countries that have many fewer people and much poorer economies. Some countries have a very impressive group of top students.
Is America rich enough that many young people here feel they can be complacent about their futures? Sure it is. But isn't it an especially good use of wealth to gain more knowledge and more ability to make the world better for everyone? Why can't the young people of the United States grow up with a sense of purpose about improving themselves and the world around them, as earlier generations of Americans apparently did?
As to the public policy point, Minnesota (where I live) was the first state in the United States to have public school open enrollment, the first to have any charter schools (and it still has more charter school places per capita than most states), and the first state to have a comprehensive, state-funded program to allow dual enrollment in colleges or universities by students completing the last two years of high school.[3] (We also have a flexible homeschooling statute, which I take advantage of as a parent.) Even at that, we here in Minnesota have a long way to go to reach the level of the top-performing countries. But any state that doesn't have as much flexibility in schooling choices for families needs to follow Minnesota's example right away. More choice and flexibility in the state education system is definitely a good idea and worth imitating in the other states in the United States.
[1] http://timssandpirls.bc.edu/timss2011/downloads/T11_IR_M_Cha...
(You can also download the full report for more context, but that download is slower.)