If what you claim is true true, public funding of universities should end. Universities should serve the public interest, and teaching is an essential part of that.
The public spends untold billions funding universities and we should at least get a well educated workforce out of it.
The thousand year old college system’s time is over if what you say is true. There’s no point to it.
Due to the bomb, US academics got a big dose of money aimed at:
Making sure the US is never behind in anything in math, science, or even medicine in any way that could hurt US national security or even the US economy or US health care. Or "Never again will US academics be permitted to operate independent of the US military" -- or some such, and I do recall the thought but just now don't recall the source.
So, the departments of math, physical science, and engineering get grants from the US NSF, DARPA, DoE, NIH, etc.
The university takes 60% or so for overhead and, thus, pays for the nice campus landscaping, the limo for the President, the glass walled coffee shop, the theater group and the string quartet concerts, the social science departments, the humanities departments, the art departments, the artist in residence program, the library, etc.
But the US stays up in number theory, mathematical and theoretical physics, computer science, ....
"Education"? There, sure, the first requirement is that the prof knows what the leading edge results are and understands them well enough to teach them and, more important, direct research in them.
How to make sure the profs are not just wasting time? Use competition, have all the profs in competition with all the other profs in the world and insist that the US profs getting funded look like the best profs in the world.
How to evaluate a prof? Count published papers. Weight the counts by the prestige of the journals. Count citations. Count prizes. See what job offers the profs are getting.
If the US starts to fall behind, then Congress can vote more money. Congress can vote lots of money, plenty to be sufficient to keep the US ahead.
Uh, Congress has lots of money because, net, the US is rich. E.g., the last time I added the retail cost of the ingredients for one of my pizzas for one, the cost was $0.39, that is, 39 cents. When a lot of US people are getting paid $30+ an hour, the 39 cents represents some astoundingly high economic productivity -- for the flour, cheese, sausage, trucks, railroads, farm machinery, wheat, corn, soy bean seeds, etc. involved.
Education for good jobs in the economy for the students? Naw, .... Instead, the main issue is the bomb, the hydrogen bomb!!!! Did I mention the bomb?