I said I would try to avoid that side of the discussion but because it was specifically mentioned I will talk about countries and why they are as they are.
First of all, university rankings are pretty unreliable for foreign institutions because you are comparing apples to oranges. American schools are generally but not always bigger, and also more luxurious, than foreign schools. I’ve seen many different methodologies for rankings, and a lot of them miss the point and especially so for foreign schools. Comparing average test scores is a bias against schools that take weaker students even if they have a lot of the very best students as well. Comparing total research output favors large schools, per capita favors ridiculously small schools, regardless of real valid productivity of the schools. A lot of nations that aren’t the US have some of their best work done not in massive universities, but in small colleges that aggregate many of the most talented people into a very focused school. A ranking that attempts to measure “student life” or spending per student favors luxury and massive budgets. In general they overstate the value of American schools. You can see this by the fact that substantial research progress does not come disproportionately out of the US but out of all nations with substantial funding for research all over the world.
Second, school quality, both real and perceived, comes and goes with the preeminence of the nation it resides in. Oxford and Cambridge, among many other schools all over the world, have suffered from their own nation’s world power waning. Part of this is funding, another part is the ability to attract the most talented people to your research staff. The US is favored for that right now. This has not and will not always be the case. Currently the US can have its pick of high-quality foreign immigration, but this is not a permanent arrangement.
Third of all, Germany specifically has a lot of internal problems that are worth looking at.
- The German model of education has always been inflexible - you have a very hard time changing tracks once you are tracked at an early age. This has little to do with necessity and a lot to do with cultural factors; a lot of these have quite unfortunately been imported into other countries which have modeled their education after the German model. It is very often associated with, but not necessity of, socialized systems that the career paths are inflexible. In recent years there has been a degree of convergence between a more flexible and a more rigid model of education in many countries, but Germany specifically has not really moved in that direction.
- Tying into the issue of inflexibility in educational tracking is the issue in inflexibility of job requirements. For far too many jobs in Germany, you have to have qualifications that go well beyond what you actually need to do the job, just to be able to get the job. To do a job that really requires a high school level of competence you need a degree, and all the exact right certifications. That's bad for getting jobs, even worse for when you have to change jobs and don't have precise requirements. We have a little bit of this issue in the US; it is much worse in Germany.
- The German economy is on the brink of crisis and sustained by unimaginably favorable circumstances. As of now, the German economy is teetering on the edge of stagnation, with a growth rate of about 1%. Which doesn't sound so bad, until you consider the circumstances. It is the most powerful nation in the European Union and one of the major hubs to which high-skilled workers should want to work in (and they do, sort of). The crisis in the rest of the EU is so bad that people are investing a lot of money into German treasury bonds at a *negative* interest rate. That is, they basically get given money that they can spend on whatever projects they want, AND they not only don't have to pay interest on it but they also don't have to give all of it back in the long run. And they're the most industrially advanced and most populous nation in the union. And for all its faults the EU does do a pretty solid job of funding scientific projects, so it's not just leaving its intellectuals to rot.
The problems are many, and I wouldn’t be able to cover all of them, but there are a few worth mentioning. The first is that the European economies (Germany in particular) are generally a lot worse at fostering entrepreneurship than the US. Partially due to badly thought out laws, partially due to excessive taxation, and partially due to lessened funding for the military and military-derivative projects (aerospace, IT, materials research, other generally high-tech stuff that needs military-grade funding to take off really). And a lot of the industry is subsidized by high-risk loans given to other countries (like Greece) that allow them to buy German exports. When repayment time comes along things will be worse.
But the most severe waste in the economy is how badly Germany has dealt with immigration. There is a lot to be said about the current Syrian refugee crisis; I will simply note that an influx of low-skilled workers at a time when the economy is weak and social welfare programs are costly is not a solid plan. But perhaps equally egregious is how badly Germany has wasted its high-skilled immigrants, especially those from the East. Many people from the Soviet bloc were highly educated and moved to the West for economic opportunities; Germany was obviously a popular destination. For example, a lot of Polish workers, including specialists like doctors and engineers, moved to Germany (among other nations) to… clean toilets for minimum wage. Why did they do it? Because the minimum wage in Germany is higher than what they could get in their own country for their own profession. They could instead have bolstered the economy by working in their specialty - if given some support then high-skilled workers are almost always a solid net plus for the country that takes them - but instead their talents were wasted because the German government’s policy was bad at addressing those immigrants.
In the US, while a lot of Soviet bloc immigrants did work in menial jobs for a few years (or for the last 10 years of their working life), most of them who wanted to did get the kinds of jobs that are consistent with their talents. In fact, I know a lot of high-skilled “Russians” (who are almost never actually Russian, by the way) who were in their 60s, who refused a promotion from low-level technology jobs because they wanted to have an easy few years before their retirement. Those who were younger, in their 20s to 50s, usually managed to get to where they wanted to go in time. The US offered them a path forward in a way that Germany does not, and that does damage the economy more than most Germans are willing to admit.
I did mention that I don’t think that the US should “become like Germany” and perhaps this gives you a few reasons why. That isn’t a very good counterexample to why socialized education is a bad thing, because I find that to just be throwing out the baby with the bathwater. That is why I don’t reference specific countries, and why I specifically avoid any form of “other countries do it better” approach here.