GDP down over 3% after five grueling quarters of recession. Unemployment at 9%. A federal budget deficit shaping up to be four times greater than average. These are our times, to the number. Uncannily, these were also precisely the economic statistics recorded during the recession of 1974-75.

Our times differ only in that inflation and interest rates now are nil, whereas both were in the double digits then. How we ever came to call ours today the worst economic crisis since the 1930s is anyone's guess. But what we learned then, in the mid-'70s, can also help us now.

Rather than parroting the idea of a second stimulus, rather than passing health care and cap-and-trade and trying to tax and spend his way out of this recession, President Obama and his Congress, and in particular the small Republican minority in Congress, should look to the supply-side revolution of a generation ago - when it dawned on legislators that tax cuts can drive the economy into prosperity.

The uncanny similarities to the '70s extend to the political sphere. The election of 1976 replaced the discredited Republican president (Gerald Ford) with a charismatic Democrat (Jimmy Carter) who said that the rich were not paying their fair share in taxes.

Moreover, the Congress elected that year was the last one till today's with a filibuster-proof majority in the Senate, and with Democrats enjoying a similar advantage in the House.

As it happened, in 1976, the year after the recession seemed to have ended, the ranks of the jobless did in fact increase dramatically - by 500,000 in the latter half of the year. So the Democrats, with their supermajorities in Congress and new president, went ahead and put together a post-recession fiscal stimulus bill.

They were advised by the old Camelot economic hand Walter Heller, who recommended "a new set of carefully crafted job-and-training programs" along with "a lot of meritorious water, sewer and other public works projects (that) are at the starting blocks and deserve early funding."

The Republicans, in their apparently hapless tiny position in Congress, responded in an interesting way. They put forward an alternative proposal of an across-the-board cut in income-tax rates, of 5% - the first suggestion of an income-tax cut made in Washington in over a decade.

The immediate effect of this decidedly uncooperative move was a showdown with the Congressional Budget Office. CBO analyzed the proposal and saw it resulting in a 14% decrease in federal revenues. A 5% tax cut resulting in triple that magnitude in revenue losses?

The Republicans behind the proposal, in particular John Rousselot of California, knew that the models the CBO used were hopelessly biased against non-Keynesian policy. They reasoned that it would prove politically useful, at some point, to have CBO on record as having said preposterous things about tax cuts.

Indeed, one of the private developers of the models CBO used, Otto Eckstein of DRI Inc., immediately wrote to Rousselot suggesting he would fix his model such that it said credible things about tax cuts.

A small victory, perhaps, but one that blossomed, in that over the next several years all the major forecasting organizations, from DRI to Chase to Wharton, felt it necessary to respect the possibility that tax cuts would result not only in minor revenue losses, but considerable economic growth and the collapse of inflation as well.

Heller's job-training-and-sewer stimulus became law in 1977, as the minority's alternative got steamrolled. But not before some heavy debate occurred in the House. Because the Republicans had attached their tax-cut amendment to the majority's stimulus measure, they could talk about it on the floor.

New York's Jack Kemp took the opportunity to reveal economic research that showed that government spending causes people to produce less and thus stood to exacerbate the inflation problem. He also pointed to studies showing that tax cuts shrink the size of the black market.

A minor victory again, perhaps. But the arguments proved so resonant to members that the next year, 1978, Kemp's own 30% tax cut passed the House twice and the Senate once - this in the same 95th Congress with its Democratic supermajorities. Kemp's tax cut was not made law only because of the intransigence of the president and the congressional leadership.

In the five years following the stimulus spending of 1977, consumer prices rose by 60%, unemployment averaged 7% (two points higher than the 20-year average) and growth collapsed with the double-dip recession of 1980-82, a recession that outdid even the 1974-75 experience in all categories.

When the electorate in November 1980 charged Ronald Reagan and his large Republican contingent in Congress with solving the horrendous stagflation problem that had been gripping the nation for years, Kemp's tax cut got passed within a few months.

By the time that tax cut fully phased in, in early 1983, the economy had embarked on what would prove a 25-year run of growth without any inflation trade-off, a quarter-century of unqualified prosperity that remains as epic a chapter as any in the industrial history of nations.

It is inconceivable that the Reagan Revolution would have occurred had the Republicans, in their hour of inconsequence in 1976 and 1977, not begun political and intellectual preparations for what they would do in power once the electoral cycle favored them again.

As Irving Kristol wrote in the Wall Street Journal in May 1977: "For the first time in half a century, it is the economic philosophy of conservatives that is showing signs of intellectual vigor, while . . . liberalism keeps tying itself into ever more elaborate knots. As some sage once observed: You can't beat a horse with no horse. Conservatives may be in the process of acquiring a horse."

If Obama and his immense congressional majority today want to keep charging ahead with passe Keynesian remedies to the challenges of economic stagnation, the early history of the supply-side revolution shows that the opposition, even if quite small in number, can with clearheadedness and determination seize the day.