The idea of a city on a hill [John Winthrop, picked up by others, including Ronald Reagan] is heartwarming. It suggests what George Bush has spoken of: that the United States is a beacon of liberty and democracy. People can look to us and learn from and emulate us.
In reality, we have never been just a city on a hill. A few years after Governor Winthrop uttered his famous words, the people in the city on a hill moved out to massacre the Pequot Indians. Here's a description by William Bradford, an early settler, of Captain John Mason's attack on a Pequot village:
Those that escaped the fire were slain with the sword, some hewed to pieces, others run through with their rapiers, so as they were quickly dispatched and very few escaped. It was conceived that they thus destroyed about 400 at this time. It was a fearful sight to see them thus frying in the fire and the streams of blood quenching the same, and horrible was the stink and scent thereof; but the victory seemed a sweet sacrifice, and they gave the praise thereof to God, who had wrought so wonderfully for them, thus to enclose their enemies in their hands and give them so speedy a victory over so proud and insulting an enemy.