The news that the city of Detroit is declaring bankruptcy may not surprise many observers who were aware of how economic decline, shrinking population, the burden of huge public employee contracts and political corruption was leading inevitably to this outcome. But it might come as something of a shock to the vast majority of Americans whose only thoughts about the subject prior to today were framed by the demagoguery on the issue that came from President Obama’s reelection campaign. As we all recall, Democrats spent a good deal of 2012 telling us that “General Motors is alive and Osama bin Laden is dead” and hounding Mitt Romney for saying that Detroit would be better off going bankrupt rather than being bailed out by the federal government. But yesterday we learned that all the sunny talk about what Obama had accomplished did nothing to save the city.

Of course, Democrats will say that when they were talking about “Detroit” last year, they were just using the word as shorthand for the automobile industry and not referring to the Motor City itself. But the memory of the way the president pounded Romney on the issue should do more than point out Obama’s hypocrisy. The collapse of what was once one of America’s great cities should also inform us about the way the liberal project is dooming municipal and state governments around the country as well as Washington to a sea of debt that cannot be sustained. Detroit isn’t just the most spectacular example of urban blight. It’s the poster child for the consequences of liberal governance.

Some liberals are telling us today that Detroit’s experience is so unique that what has happened there can’t be compared to any other city’s problems. It’s true that there is no more absolute example of urban collapse. But Detroit isn’t the only place where the decline of labor-intensive manufacturing and white flight caused a collapse. While other large cities, such as New York and Philadelphia, underwent crises that were met and overcome in the last generation before undergoing revivals, Detroit has been going downhill for more than 60 years. While Detroit had particular problems that may not have been faced elsewhere, the basic conundrum is not unique. But rather than face up to the need to change the old liberal formula of expanding government and letting corruption go unchecked, this bastion of liberalism refused to alter its course. Decades after leaders like Ed Rendell and Rudy Giuliani showed how it was possible to govern places that were thought ungovernable, Detroit continued acting as if the old boodle theory of politics could continue as mayors as well as other politicians were involved in criminal conspiracies rather than reform.

The lesson here is that a government that continued to overpromise and create unfunded liabilities to please political constituencies cannot survive indefinitely. And that goes straight to the glaring problem that was the foundation of President Obama’s false boasts about “saving Detroit” that caused Romney so much trouble last fall.

Detroit’s bankruptcy shows that federal bailouts for industries can’t solve all the country’s problems, especially when cities are sinking under the weight of generous municipal contracts for public employees. It’s true that many other cities that are facing shortfalls because of debts they’ve signed off on to pay off unions are working better than Detroit, where 40 percent of the street lights don’t work and it takes nearly an hour for police to arrive at an average high-priority emergency.

But unless the power of unions to bankrupt municipalities and state governments is cut back—much as Wisconsin’s Governor Scott Walker and New Jersey Governor Chris Christie have tried to do—everywhere, Detroit won’t be the last city to go bankrupt. The accumulation of debt to pay off the promises made by liberals is a problem that threatens cities all over the country, even some that are seemingly in much better shape than Detroit.

The Obama paradigm of building more entitlements like ObamaCare and throwing federal money at regional problems is based on the liberal assumption that the government piper will never have to be paid. Democrats have blasted their Republican counterparts as heartless Tea Party extremists and obstructionists for refusing to play along and let the system go on as it has for decades building debts that can’t ever be met. But unless someone or some group is able to enact real change, Detroit is America’s future, not, as some are telling us, an exception to the rule.

This week we got a wake up call that tells us that Obama didn’t save Detroit from bankruptcy. He is merely one more in a string of liberal enablers that helped create the situation there that may well be replicated elsewhere eventually, even in cities that are not in as dire straits today as Detroit is. It’s time for America to sober up and realize that without government reform based on the end of liberal illusions, Detroit will become a metaphor for how America became like Greece: bankrupt, corrupt, and a shadow of its past faded glories.