MSNBC host Melissa Harris-Perry—the same TV commentator who said Americans need to stop raising kids as if they belong to individual families—had an extraordinary explanation for why the city of Detroit sought to declare bankruptcy last week: not enough government.

"This is what it looks like when government is small enough to drown in your bathtub, and it is not a pretty picture." She says budget-cutting Republicans threaten to transform all of the U.S. into Detroit.

What? Detroit has been a "model city" for big-government! All Detroit's mayors since 1962 were Democrats who were eager to micromanage. And spend. Detroit has the only utility tax in Michigan, and its income tax is the third-highest of any big city in America (only Philadelphia and Louisville take more, and they aren't doing great, either).

Detroit's automakers got billions in federal bailouts.

The Detroit News revealed that Detroit in 2011 had around twice as many municipal employees per capita as cities with comparable populations. The city water and sewer department employed a "horseshoer" even though it keeps no horses.

This is "small enough government"? Harris-Perry must have one heck of a bathtub.

Politicians think they know best, but they can't alter the laws of economics. They can't make mismanaged industries, constant government meddling, welfare and bureaucratic labor union rules (Detroit has 47 unions) into a formula for success.

County Judge Rosemarie Aquilina wants to stop the bankruptcy process on the grounds that state law forbids Detroit to cut government services. But how will Detroit pay for the services? Unsustainable public-sector pensions, a bloated workforce—it's all supposed to continue somehow.

Politicians on Detroit's city council aren't even willing to sell off vacant lots that the city owns, or even a portion of the billions of dollars in art in its government-subsidized museum (including the original "Howdy Doody" puppet).

On my TV show, I confronted the council's second in command about his refusal to let Detroit sell land. He says he voted against it "because the developer wants to grow trees. We don't need any more new trees in our city." The politicians micromanaged themselves into bankruptcy, and they want to keep digging.

A member of the British Parliament writes that Detroit is like the fictional city of Starnesville in Ayn Rand's 1957 novel "Atlas Shrugged"—a car-manufacturing city that became a ghost town after experimenting with socialism. In the novel, Starnesville's demise is the first sign that the entire society is approaching collapse.

Detroit is already there. 911 calls sometimes go unanswered. Two-thirds of the population left town.

As usual, the politicians want to try more of the same. They constantly come up with plans, but the plans are always big, simple-minded ones that run roughshod over the thousands of little plans made by ordinary citizens. Politicians want new stadiums, new transportation schemes, housing projects.

Andrew Rodney, a documentary filmmaker from Detroit, says many bad, big-government ideas that have plagued the U.S. were tried out first in Detroit. "It's the first city to experience a lot of the planning that went into a lot of cities."

Home loan subsidies, public housing, stadium subsidies, a $350 million project called "Renaissance Center" (the city ended up selling it for just $50 million), an automated People Mover system that not many people feel moved to use (it moves people in only one direction), endless favors to unions—if a government idea has failed anywhere in America, there's a good chance it failed in Detroit first.

And if you criticized them for it, politicians like former Mayor Coleman Young called you a racist. "To attack Detroit is to attack black," Young said. That tends to shut critics up.

But the laws of economics apply to us all.

Insulated from serious criticism, insulated from economic reality, Detroit thought somehow it'd muddle through—until now. There is a big lesson, if people elsewhere are willing to learn before it's too late.