That sounds so nice until you realize that local communites can do horrible things to people they don't like through their governments (minorites, gays, whatever..."State's rights!"), so you need the fed gov to guarantee rights.
And local communities can do things like rape resources and historically/naturally significant places and pollute and all sorts of things that affect us all, so the fed gov should help manage this stuff.
And the fed gov should work to prevent the unadulterated monopolies that would take hold of everyone's lives and prevent the little guy from having an economic chance, which is what happens when a libertarian dream is realized literally. (Not the "people's" anything, as you'd envision...unadulterated libertarianism results in complete and total economic domination by the rich and cultural domination by corporations who wanna sell us stuff.)
So the government does have some other stuff to do...not that I'm unsypathetic to libertarian ideals or principles, but it has to be tempered with reality.
The problem is that once the fed solves certain problems, people want to use it to solve all of them, and you get a creeping effect.
