Arguably a misquotation, probably misleading absent the context, and definitely an incomplete quotation.

Speaking narrowly and specifically about the economic crisis and stagflation of the late 70s:

In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people.

The surrounding context doesn't really change/clarify that core message very much.

It does, it is saying the government had been the cause of the economic crisis of the time, not that it was generally the problem of all things.

the context makes it ironic even, considering they benefit from that exact sentiment to be elected.