Where I live, Hoboken, NJ, the high school math and reading proficiency rate are 8% and 44% respectively, while the graduation rate is >95%
What the hell are they doing if they're not even teaching kids math and reading? And why are they graduating them?
Grades aren't meant to be a feel good merit badge. They're supposed to be an accurate reflection of your level of knowledge relative to your peers. If it ceases to be that, then the selection just happens elsewhere. So now high school diploma isn't worth anything because everyone graduates. Hiring a high school graduate doesn't even guarantee you the person can read. Same thing happens in bachelors as schools become less selective and inflate grades.
My personal opinion is that the government should get out of education, just lower our taxes and let the free market handle the rest. Never gonna happen, however.