US libertarians often have this notion that states would make the right kind of laws. No regulation of industry, lax gun control, that sort of thing. They have this notion that the state government is closer, and thus more accountable.
On the topic of Ron Paul, he's a hypocrite who's concerned about what the federal government commands, unless it's something he wants, in which case he's for it. He's against right to privacy, ability to purchase birth control, and he supported DOMA.