The funny thing is that everyone sees what they want to see. But there is only one reality, and that can be discovered only by reading large amounts of their writings as well as source info. They were not Libertarian in that they believed virtue mattered. They were not liberals in that they believed government was more of the problem than the answer. They were way more small gov't than most contemporary conservatives, but they probably believed in more local government on social issues than liberals or libertarians care to acknowledge. They believed in ordered liberty and natural law. They definitely believed in man's sin nature, and that is what made them so cautious of power concentrated in ANY hands.
Oh, and they believed in Intelligent Design. Ooooo, how "unconstituional" of them.
I agree with you that they were not libertarians, but not because "they believed virtue mattered." Libertarians believe that virtue matters as much as any people do. There is nothing in the libertarian philosophy that discounts virtue. Virtue is as important to libertarians as it is to republicans, democrats, or any other political philosophy you can name.
They were not libertarians because that level of philosophy had not been developed as yet in their time. Refinements to the liberal philosophy would take almost a hundred years after the founding fathers. Connecting that new refined liberalism to libertarianism would take an additional fifty years. Of course they were not libertarians.
The founding fathers were however liberals. The current misuse of the word "liberal" may have been popularized by a few extremists, but that popularization is not strong enough to overcome its historic definition. When a child first reads it, looks it up in a dictionary, that meaning will hold far longer than any ill conceived popular mis-usage.
Where do you get the idea that there is a conflict with libertarian views and the belief that virtue matters? Quite the contrary. The whole point of emphasizing virtue, in their writings, was that they believed in the libertarian view of man; that man has free will, and must be held responsible for his conduct; in a system of responsibility and accountability.
As a contemporary Conservative, I certainly do not believe in "big government." The least is the best.
As to local government and social issues? See Jefferson's Chapter in his book, on Welfare. He did not advocate Governmental involvement in dealing with poverty. He highly praised the method of the time, for dealing with genuine want, which was Church not civilly directed. I believe that it is in the following Chapter in the Debate Handbook, where it is quoted: Chapter One--Conservative Debate Handbook.
William Flax