Rarely does a single political commercial reveal as much about a presidential campaign as the ad unveiled this week by Rep. Ron Paul (R-Texas).

Here is audio-visual near-proof of a crucial difference between Paul '12 and the rEVOLution of '08: This time the libertarian Republican is in it to win it. The production values are upper tier, the choice to attack Texas Gov. Rick Perry indicates a candidate trying to elbow his way past other grassroots-pleasing types, and the Reagan-good, Gore-bad message of bedrock conservative principle is plainly tuned to tickle the ears of mainstream Republicans.

But there's a fascinating gap in the ad's chronology, one that is a good deal more complex than the choice at the commercial's end between "Al Gore's Texas cheerleader, or the one who stood with Reagan." Ron Paul, like many small-l libertarians, was indeed an early and enthusiastic supporter of Ronald Reagan's presidential ambitions…in 1976. By 1988, when Rick Perry was still a Democrat who supported and endorsed the-then Blue Doggish Al Gore, the initial libertarian enthusiasm for "Reagan's message of smaller government and lower taxes" had disintegrated into acute alienation over the Great Communicator's tangible record of growing government, debt, and foreign entanglements.

Rick Perry and his supporters this week are firing back at Paul's Reagan-repudiating record, quoting from his 1987 resignation letter from the Republican Party and other comments from Paul's 1988 Libertarian Party run for president. These gotcha attempts actually bolster Paul's credentials as a limited-government conservative, and highlight an important libertarian critique of Reagan (and by extension, the modern GOP) that has mostly been washed away by decades of Republican nostalgia for The Gipper.

Paul's '87 resignation letter lays out the bill of particulars:

In 1976 I was impressed with Ronald Reagan's program and was one of the four members of Congress who endorsed his candidacy. In 1980, unlike other Republican office holders in Texas, I again supported our President in his efforts. Since 1981, however, I have gradually and steadily grown weary of the Republican Party's efforts to reduce the size of the federal government. Since then Ronald Reagan and the Republican Party have given us skyrocketing deficits, and astoundingly a doubled national debt. How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together?… Tax revenues are up 59 percent since 1980. Because of our economic growth? No. During Carter's four years, we had growth of 37.2 percent; Reagan's five years have given us 30.7 percent. The new revenues are due to four giant Republican tax increases since 1981. All Republicans rightly chastised Carter for his $38 billion deficit. But they ignore or even defend deficits of $220 billion, as government spending has grown 10.4 percent per year since Reagan took office, while the federal payroll has zoomed by a quarter of a million bureaucrats…. [B]ig government has been legitimized in a way the Democrats never could have accomplished. It was tragic to listen to Ronald Reagan on the 1986 campaign trail bragging about his high spending on farm subsidies, welfare, warfare, etc., in his futile effort to hold on to control of the Senate. Instead of cutting some of the immeasurable waste in the Department of Defense, it has gotten worse, with the inevitable result that we are less secure today. Reagan's foreign aid expenditures exceed Eisenhower's, Kennedy's, Johnson's, Nixon's, Ford's, and Carter's put together. Foreign intervention has exploded since 1980. Only an end to military welfare for foreign governments plus a curtailment of our unconstitutional commitments abroad will enable us really to defend ourselves and solve our financial problems.

There's plenty more in there about inflationary monetary policy, the drug war, arms-for-hostages, insufficient tax reform, failing to abolish the Selective Service and various federal departments, and so on. Conclusion? "There is no credibility left for the Republican Party as a force to reduce the size of government. That is the message of the Reagan years."

As the GOP presidential candidates prepare for their quadrennial pilgrimage to the Reagan Library in Simi Valley, California, the Paul/Perry fight over Reagan's legacy is certain to come up in the debate. It would be an excellent occasion to revive two underappreciated points: That Ronald Reagan in the mid-1970s really was a rhetorical "radical for capitalism" (at least by the heavily debased standards of mainstream American politics), and that his presidential record was considerably less impressive than advertised on restraining the growth of government.

For evidence of the former, look no further than Reason's classic interview with Reagan in July 1975. His ideas about libertarianism were a mixed bag to be sure, but, well, here's how he answered the first question:

If you analyze it I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals—if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is. Now, I can't say that I will agree with all the things that the present group who call themselves Libertarians in the sense of a party say, because I think that like in any political movement there are shades, and there are libertarians who are almost over at the point of wanting no government at all or anarchy. I believe there are legitimate government functions. There is a legitimate need in an orderly society for some government to maintain freedom or we will have tyranny by individuals. The strongest man on the block will run the neighborhood. We have government to insure that we don't each one of us have to carry a club to defend ourselves. But again, I stand on my statement that I think that libertarianism and conservatism are travelling the same path.

After years of talking about the virtues of capitalism and freedom versus the drawbacks of socialism and tyranny (plus a less-inspiring stint as California governor), Reagan emerged in post-Watergate America as a kind of renewed link to the limited-government standard-bearing of Barry Goldwater. Ron Paul isn't exaggerating at all when he talks about the enthusiasm with which he endorsed Reagan in 1976; his now-Senator son Rand has described the 1976 GOP convention as "perhaps my best education concerning the rough-and-tumble world of politics." Rand was 13, and the memory still burns:

Perhaps ironically, every Republican likes to claim the mantle of Reagan these days, sometimes out of genuine admiration, other times, pure politics. I'll always remember that much like my father today, Reagan in 1976 was considered by many establishment types to be outside the "mainstream" of the Republican Party, as evidenced by not only Ford's people but later in 1980 when presidential candidate George H.W. Bush would describe Reagan's tax-cutting proposals as "voodoo economics." Today, media pundits like to ask whether there would be a place for Reagan in the "extreme" Tea Party, bashing the supposedly "radical" movement for wanting to do things like abolish the Department of Education—forgetting that Reagan also wanted to abolish it. The left-wing media attacks Tea Party candidates as belonging to an impractical "party of no," forgetting that Reagan also saw the state, unequivocally, in negative terms, declaring that "Government is not a solution to our problems, government is the problem." Conservatives were naturally disappointed that despite such rhetoric, government and our national debt grew exponentially under Reagan….

Ron Paul's disillusionment with the Reagan Revolution was perfectly in keeping with the mainstream of libertarian thought in the 1980s, as evidenced by the comments you hear today from former Reaganite David Stockman, and by a cursory glance at Reason's own archives.

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As early as September 1980, then-Reason Editor Robert Poole, Jr. criticized Reagan for jumping on the Moral Majority's "anti-sin bandwagon." In November 1980, Doug Bandow warned about a "massive arms buildup" on the immediate horizon. And most pertinent to a discussion about Ron Paul, then-Reason columnist Murray N. Rothbard (who gets a dedication in Paul's latest book) came right out of the chute making "The Case for Pessimism" about Reagan's electoral victory:

The election was a resounding triumph for the Conservative Revolution, which consists of three basic parts: (a) tax cuts and more of a free market; (b) increased militarism and an ultra-hawkish foreign policy, ever seeking confrontation with an atheistic and literally "Satanic" Soviet Union; (c) a theocratic Moral Majority reinstallation of God and the family and a crushing of the infidel. Only part a can be considered in any sense libertarian; parts b and c are quite the opposite…. But may we not at least take comfort from the free-market part of the Conservative Revolution? No, because that part of the revolution has already been thoroughly betrayed, even before the Reagan administration took office…. There will be no free-market revolution, no end to inflation, no balanced budget—just marginal tinkering with the status quo, as usual.

Given that initial blast of libertarian skepticism, it's not hard to see how the 1980s played out like the last snuffing out of optimism for working within the system to limit government.

But what about Ronald Reagan, victorious Cold Warrior? How does the relentless anti-imperialism of Ron Paul square with the Republican narrative that Reagan's libertarian-loathed defense build-up and foreign adventurism hastened the collapse of the 20th century's longest-lasting anti-libertarian empire? Rand Paul, in his book, sketches out an answer:

Conservatives who now compare Reagan's defense build-up during the Cold War—when we faced down a world superpower with massive nuclear capability—to the supposed need for increased defense budgets today to fight a drastically different type of enemy, do a disservice to Reagan, his legacy and common sense.

Will that kind of nuance work at the Reagan Library tonight? Ron Paul's fortunes, and the future of the Republican Party, may depend on it.

Matt Welch is editor in chief of Reason magazine and co-author (along with Nick Gillespie) of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America (PublicAffairs).