An energetic and forceful Fred Thompson sat down with me last week on "Kudlow and Company" to talk politics and the economy. The former Tennessee senator was in good form -- more animated than I've seen him and definitely a different person than the one I interviewed six months ago.

I asked him about Dick Armey, the former Republican House majority leader. Armey recently predicted that Hillary Clinton will be the next president, reasoning that the GOP has departed from the first principles of limited government and lower taxes. Armey said budget overspending and the proliferating corruption of earmarks are what led to the landslide defeat of Republicans a year ago. To date, Dick Armey is unimpressed with the circa 2007 GOP message.

And Thompson agreed. He said, "If we don't tend to business we are going to be in big trouble. Pendulum's swinging against us. We are down in the polls. Independents are leaning the other way (where they) used to lean with us. So we've got to ... adhere to the principles that made us a great party and a great nation."

That was a strong dose of honesty and self-examination. Good for Fred Thompson.

Speaking of limited government and budget overspending, I asked if a President Thompson would veto the $300 billion earmark-pocked pork-barrel farm bill now before Congress. He called this legislation "disgraceful," and noted that it wouldn't even help small family farms and that it would block the expansion of world free trade.

When I asked him about Warren Buffett, the famous investor billionaire, Thompson turned up the heat. In testimony before the Senate last week, Buffett advocated a whole series of tax hikes, such as an increase in the death tax, higher capital gains and dividend taxes, and more taxes on private partnerships, hedge funds and private-equity buyout firms.

Thompson labeled this policy dead wrong. He said Buffett is nothing more than a mouthpiece for the Democratic Party. He argued that the wealth of the government is not the same thing as the wealth of nations and that history proves lower tax rates promote economic growth.

And he said Hillary Clinton and the other Democratic candidates are blind to all this. He noted that the top 5 percent of income earners now pay 60 percent of all tax collections; that the tax code is progressive enough; that there's plenty of economic mobility in the country; that for those who have fallen behind, the problem is poor education, not tax rates; and that America is the freest, most prosperous, most powerful nation in the history of the world.

We talked about his controversial Social Security reform plan, which would slow down future benefits by indexing them to inflation rather than wages, while providing for add-on private savings accounts with a government match, Lower benefits? Isn't that the proverbial third rail of politics? Not according to Thompson. He said big problems ought to be tackled: "If you can't do the right thing, say what you believe and what everybody really basically knows, why do it? Why bother? Life is too short for the aggravation."

Thompson wants to tell the truth about Social Security and force everyone else in the game to respond. This issue is a real character-building definer for Fred Thompson. No one else on the campaign trail, in either party, is willing to discuss Social Security in such frank terms.

But that's the revitalized Fred Thompson. The more I challenged him, the more animated he became. He simply refused to stand down.

Some people say Thompson doesn't have the fire in his belly to go the distance. I don't think that's true. And I'm not picking or endorsing any candidates here. But Thompson has an honest, clear, straightforward message of economic freedom and problem solving.

Then I brought up the CNBC-Wall Street Journal debate of a few weeks ago, when Thompson slammed Rudy Giuliani. I asked if he intended to continue to pound Giuliani on the campaign trail. He said, "I haven't pounded all day." And yesterday? He replied: "Well, we're pointing out some policy differences. (Giuliani) believes in federal funding for abortion. He went to court to stop our bill outlawing sanctuary cities. He's never met a gun-control bill he didn't like."

A sharp-edged Fred Thompson.

Can he win? His campaign strategists told me they are pouring tons of money into Iowa advertising. They see a strong opportunity for a Thompson surge in the state, undermining Romney and inflicting damage on Giuliani. Walking off the set, Thompson told me this election will be about peace and prosperity. And he intends to fight hard.