Foreign policy views based on a foundation of "American" ideals may seem brave and noble, but to much of the rest of the world it is arrogant and foolhardy. The way we treat the rest of the world is more often than not rooted in our own interests, naturally. This bastardizes the idea.
But without using the idea of America as an excuse to do whatever we'd like, it would be better to live up to this idea domestically, as the quote states. Rather than force it upon the rest of the world, we should be leading by example. Otherwise we are betraying both the idea as well as the perception of it.
So, to answer the question in the thread title, I think it is a good, albeit fanciful quote. But as a motivation or inspiration for foreign policy it is tripe. Much like this disorganized reply