Of all the reactions to Detroit's bankruptcy, perhaps the most surprising came from Rand Paul.

Paul, the junior Republican senator from Kentucky and Tea Party leader, is announcing his own rescue plan at the Detroit Economic Club today. It's a city he doesn't represent in Congress, that doesn't contain many likely Paul voters for 2016, and has been dominated by an automobile industry Paul was against bailing out.

Paul emphasizes that his plan for Detroit isn't a taxpayer-funded bailout either. Instead he would make the city an "economic freedom zone", slashing taxes and regulations rather than shoveling federal largess. He would eliminate the capital gains tax and provide incentives for entrepreneurs to relocate to Detroit in order to create jobs.

The senator admitted his proposal amounted to "enterprise zones on steroids", an homage to Jack Kemp, a Republican who sought to bring supply-side economics – and robust growth – to the inner city.

In one sense, this isn't new. Kemp long argued that tax cuts, deregulation, and the proliferation of small business were the real keys to urban renewal and a more lasting foundation for prosperity. Ronald Reagan hoped to send blacks and blue-collar white industrial workers a message by accepting the Republican presidential nomination in Detroit in 1980.

Although the backlash against his tentative comments about the Civil Rights Act of 1964 never fully receded, Paul worked hard at minority outreach. He has added to the usual Republican repertoire of enterprise zones and school vouchers with concern about racial disparities in the federal war on drugs and relief from mandatory minimum sentences.

Enterprise zones may not be adequate for dealing with the collapse of manufacturing and the disappearance of blue-collar work in many parts of the country, among other deep-seated economic problems. They certainly didn't attract many black votes to the Republican Party.

In 1996, when Kemp was on a ticket headed by Bob Dole, who actually voted for the 1964 Civil Rights Act, they managed just 12% of the African-American vote. (Though that is high compared to the single-digit showings in three out of the last four presidential elections.) But libertarian-leaning Republicans have quietly moved from the controversies of Ron Paul's racially inflammatory newsletters to being the wing of the party most interested in coming up with an agenda worthy of minority support.

It's a transformation that began with the elder Paul's presidential candidacy, when he emphasized the negative impact many policies supported by law-and-order Republicans have had on the black community. In many ways, it's a logical extension of their message on civil liberties and protecting ordinary Americans from the capricious – and often vicious – behavior of big government. But in previous years, many libertarians and conservatives have instead been seen as defending racist behavior by private sector actors.

How much figures like Paul can change this narrative remains to be seen. As New York Times columnist Ross Douthat observed, "Inevitably, a political persuasion committed to a limited conception of government's role is going to have more to offer when it comes to reshaping existing, problematic government policies than when it comes to expanding state power to correct deeper-seated inequities."

While Detroit may be good example of what happens when government grows beyond the private sector's ability to pay for it, turning its problems around could also test the limits of limited government.

And what do liberty-minded Republicans do when the immigration policies many of them are beginning to champion, at least in part to reach out to Hispanics, may have a detrimental impact on African-American wages and employment opportunities?

But these kinds of breakthroughs cannot be achieved unless they are tried, however haltingly or imperfectly. At a bare minimum, Republicans need to appear willing to leave the comfort zone of their own constituencies and aspire to more fully a party for all Americans. If Richard Nixon could go to China, then certainly Rand Paul can go to Detroit.