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First of all, it is important to remember that both of those terms, "liberal" and "libertarian," can be interpreted differently by different individuals. Not all persons who describe themselves as agreeing with one of these philosophies will necessarily agree with every item of party policy.
Liberals tend to advocate for the continuation of support systems and programs under the control and funding of the national government. They contend that the government is obligated to help to provide services to guarantee all citizens an acceptable quality of life.
American liberals support a role for government in the relief of poverty, universal healthcare, universal education, organized labor, and protection of the environment, and support payment for these services by a progressive income tax.
Libertarians generally want to minimize the impact the government can have on as many aspects of the individual citizen's life as possible. They feel that individual rights are paramount and that the government should allow individuals to take responsibility for themselves and any consequences that this may entail. Liberatarians advocate
abolition of compulsory military service, government control of television and other media, laws regarding sexual activity between consenting adults, laws against the use of mood-altering substances, and government control of migration and immigration. Under its leadership farming quotas and subsidies would be eliminated, there would be no mandatory schooling and no minimum wage, and defense spending would be drastically reduced.
Liberals would have the government play a fairly intrusive role in the economy. They would say that the government should do things like setting minimum wages or maximum hours that workers can work. By contrast, libertarians want the government to stay out of the economic sphere. They would like the government to allow businesses to act however they like so long as they are not actually harming anyone in a physical sense.
They do, however, generally share similar attitudes toward social issues. Many liberals, while believing that the government should play an active role in regulating the economy and business to avoid abuses, don't think the government should play much of a role at all in, say, banning abortion or in defining marriage. Many libertarians would agree with the second part. As far as the economy goes, liberals would say we should strive to achieve economic justice, whereas libertarians would say we should strive for economic freedom.
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