Harry Browne gave the best answer more than a decade ago, saying he wanted a government "small enough to fit back inside the Constitution."

Never let the parasite take root in the first place yes preferable

The ideal libertarian state will have the government not initiate force. It also means that government will not act on what has yet been done. It will not read minds and determine someone is guilty before a criminal act is committed.

The problem is that society has depended on governmental forceful interference for more that a century, and it would be unfair and cruel to wipe the slate clean. There would be a transition period. Libertarian ideals would be worked in. But it has to be done or else we're doomed to a financial meltdown. Key to this is to convince Republicans and Democrats that government cannot act as a providential god, and that charity cannot be forced. Once they realize that they will never win the war to take over the government and enforce their ideals and lifestyle on everyone, they will settle for government not inflicting any lifestyle or ideals on anyone. People need to wake up to this. It's the Great Compromise.

But to answer the question, never trust the government to look after your well being. You will be disappointed every time.

As to the specific question at the end, I like the answer Not Convinced gave. To your first question, the answer to that determines what type of libertarian you are. Some libertarians still have faith in the justice system and military. I am an anarchocapitalist , which means my answer is the government should govern nothing.

The Libertarian platform is fairly clear on just how small: [lp.org]

It does speak to environmental protection, but not very explicitly. Here's what it says about that:

2.2 Environment

Competitive free markets and property rights stimulate the technological innovations and behavioral changes required to protect our environment and ecosystems. Private landowners and conservation groups have a vested interest in maintaining natural resources. Governments are unaccountable for damage done to our environment and have a terrible track record when it comes to environmental protection. Protecting the environment requires a clear definition and enforcement of individual rights and responsibilities regarding resources like land, water, air, and wildlife. Where damages can be proven and quantified in a court of law, restitution to the injured parties must be required.