“Of a sudden,” the late Daniel Patrick Moynihan wrote in 1981, “the GOP has become a party of ideas.”

Senator Moynihan’s statement suggested two things: liberalism was exhausted and conservatives took advantage of the opening by offering an agenda that matched the challenges of that moment: high inflation and interest rates, a top marginal tax rate of 70 percent, “stagflation,” a hollowed out military and Soviet advances all over the world.

Today, once again, liberalism is out of steam. As they watch their unwieldy health-care law sputter and disappoint, liberals don’t have much else to turn to. Their own top priorities tend to be unpopular, and both their ideology and their political coalition constrain them from speaking to the public’s main concerns—economic stagnation and the middle-class squeeze. The president ran for re-election on remarkably little policy substance, and now offers even less. Who could say what his governing vision consists of?

Not surprisingly, he has witnessed a major collapse in his public support, especially among independents, which in most polls now disapprove of the president’s handling of the economy by a two-to-one margin. About two-thirds of Americans say the country is on the wrong track. Even more are angry about the way things are going in Washington. And public confidence in government is near historic lows. So the moment is ripe for the GOP, at the national level, to offer the public a real alternative.

Whether it will, of course, remains an open question. But recent months have offered some encouraging signs. Republicans already showed some real leadership in the president’s first term by offering a serious, market-oriented Medicare-reform proposal—produced by House Budget Committee Chairman Paul Ryan and backed by essentially every Republican in Congress.

Earlier this year, Senators Tom Coburn, Richard Burr, and Orrin Hatch followed up with a health-care proposal that would cover as many people as the Affordable Care Act without the taxes, mandates, and burdensome regulations and at a far lower cost by empowering consumers. Another ambitious health-reform bill is now co-sponsored by a majority of House Republicans.

Mr. Ryan and Senator Marco Rubio (among others) have proposed serious reforms to help sustain the safety net for the poor by re-orienting it toward work and opportunity. House Ways and Means Chairman Dave Camp and Senator Mike Lee have each proposed a major tax reform plan—and a combination of the two could well make for a winning Republican tax agenda. Other prominent proposals have included reforms of higher-education policy to increase options and lower costs, and reforms of transportation policy, the criminal-justice system, unemployment assistance, and more.

It is still fashionable in some circles to call Republicans the “Party of No,” but when has there been such a flurry of concrete policy proposals from an opposition party in Congress?

Even these proposals, of course, are only a start. They have yet to gain broad support, or to be brought together into a coherent conservative agenda. But they are suitable for such an effort, and they offer plausible, targeted, market-friendly approaches in precisely the areas that most trouble voters, and where Democrats have been failing most decisively.

A party that controls one-half of one-third of the federal government can’t hope to see its agenda become law at this point, and high profile confrontations with the Obama administration – such as the government shutdown last October – have mostly ended disastrously. But what the Republican Party can do is gradually build a new internal consensus around a policy agenda of conservative reforms that appeal to a broad base of voters, and which Republican candidates and the party’s next presidential nominee can then run on.

To approach the success of Republicans of past eras, those of this generation must again show how their ideas will improve the lives of American families in concrete ways by applying timeless American principles to a new set of American challenges. Today’s GOP has not done nearly enough of that.

The Republican Party can be the party of the 21st century by showing itself able and willing to reform public institutions that were designed for the needs of the mid-20th century – many of which are now antiquated and out of touch not only with the needs of our time but the expectations of Americans in an age of constant innovation and endless choices.

It can own the future by showing the public how limited government can also be effective government. It can succeed, in other words, by embodying not just an oppositional conservatism but also a governing conservatism.

It’s not yet clear if the party is ready to follow this path. But it is worth noting even modest signs of hope.

Peter Wehner is a senior fellow at the Ethics and Public Policy Center.