When he visits Strasbourg, France, this week to participate in festivities marking Nato's 60th anniversary, President Barack Obama should deliver a valedictory address, announcing his intention to withdraw the United States from the alliance. The US has done its job. It's time for Europe to assume full responsibility for its own security, freeing the US to attend to more urgent priorities.

The creation of the North Atlantic Treaty Organisation in 1949 remains a singular example of enlightened statecraft. With Europe's democracies still suffering from the ravages of the second world war, and fearing the threat posed by Stalinist Russia, the US abandoned its aversion to "entangling alliances" and committed itself to Europe's defence. General Dwight Eisenhower came out of retirement to serve as Nato's first military chief. As US forces arrived to take up their stations, the alliance soon found its footing. In its heyday, Nato possessed formidable capabilities and real (if never fully tested) cohesion. Its safety ensured, western Europe prospered and remained at peace.

Over time, the Soviet threat diminished and eventually disappeared. Since then, however, an alliance once regarded as the most successful in all of history has lost its way.

When the end of the cold war left Russia temporarily weakened, the United States and its allies wasted no time in exploiting that weakness. Nato pressed eastward, incorporating into its ranks nations that had previously formed part of the Soviet empire and of the Soviet Union itself. American policy-makers urged the alliance to expand its reach, abandoning its defensive posture to become an instrument of intervention. According to the conventional wisdom of the 1990s, Nato needed to go "out of area" or it would surely go "out of business".

This programme of enlarging both Nato's territorial expanse and its ambitions has now reached an impasse. Through its military punishment of Georgia last year, Russia has signalled it will not tolerate further encroachments into what the Kremlin sees as its legitimate sphere of influence. Meanwhile, through its ineffective performance in Afghanistan – Nato's most ambitious "out of area" contingency – the alliance has revealed the extent to which its capabilities and its cohesion have eroded.

Present-day Nato is a shadow of what it once was. Calling it a successful alliance today is the equivalent of calling General Motors a successful car company – it privileges nostalgia over self-awareness.

As with GM, so too with Nato: fixing past mistakes will require painful changes. Continuing along the existing trajectory is not an option. If the alliance pursues any further eastward expansion (incorporating Ukraine into its ranks, as some in Washington have advocated), it will implode. If it persists in attempting to pacify Afghanistan (vainly trying to prod the Germans and other reluctant allies into deploying more troops with fewer strings attached), it will only further expose its internal weakness. Nato won't survive by compounding its own recent errors.

Salvation requires taking a different course. However counterintuitive, the best prospect for restoring Nato's sense of purpose and direction lies in having the US announce its intention to exit the alliance.

Salvaging Nato requires reorienting the alliance back to its founding purpose: the defence of Europe. This remains a worthy mission. Although Vladimir Putin's Russia hardly compares with Josef Stalin's Soviet Union, and although current Russian military capabilities pale in comparison with those of the old Red Army, the fact is that Europe today does face a security threat to its east. Having been subjected (in its own eyes at least) to two decades of western humiliation, authoritarian Russia is by no means committed to the status quo. Given the opportunity, the Kremlin could well give in to the temptation to do mischief. Nato's priority must be to ensure that no such opportunity presents itself, which means demonstrating an unquestioned capacity for self-defence.

The difference between 1949 and 2009 is that present-day Europe is more than capable of addressing today's threat, without American assistance or supervision. Collectively, the Europeans don't need US troops or dollars, both of which are in short supply anyway and needed elsewhere. Yet as long as the United States sustains the pretence that Europe cannot manage its own affairs, the Europeans will endorse that proposition, letting Americans foot most of the bill. Only if Washington makes it clear that the era of free-riding has ended will Europe grow up.

Nato's anniversary bash promises to be an historic event. As part of his promise to promote change, Obama should make it a farewell party.

This article originally appeared in the Los Angeles Times.