Most likely to be a terrorist?

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So there's a school under fire for hosting a mock awards ceremony for it's 7th graders. It was an awards ceremony hosted by the teachers as a joke, with awards such as "Most Likely to be a Terrorist", "Most Likely to Blend in With White People" (to a little black girl), "Most Likely to be Homeless", etc.

Of course, a lot of the kids had hurt feelings, and it caused some issues with bullying. There are a few kids who still have not returned to school, out of embarrassment.

The district has issued an apology and has stated the teachers will be dealt with according to policy (but most likely not fired).

What do you guys think? Was it just a joke being made into too big of a deal? Is just a slap on the wrist a fair punishment? Or should the teachers be fired for this incident ?