How to argue against libertarianism:
Simple: lie your ass off, to yourself above all else. Always argue from the assumption that the U.S. has a raging Ayn Rand laissez-faire free market with no regulations, then proceed to blame all of the problems with its troubled economy on "capitalism."
For example, with respect to U.S. healthcare, completely ignore acts of government such as the FDA drug regulation, ObamaCare, tax incentives that have make it almost impossible to purchase insurance except through an employer, insurance regulations forcing policies to cover everything that can possibly go wrong in a person's life, physician licensure, EMTALA, the fact that the government already pays for 50% of all healthcare expenses through Medicare, and any other facts that might be pointed out to you that could potentially undermine your view that doctors make too much money and must be crushed..er, I mean that healthcare is a basic human right. Once all the facts are blocked out of your mind, proceed to hammer away at the following sound byte: "Every other industrialized country in the world has single payer healthcare!" Just say that over and over and over again until your free market opponent gives up in disgust. Victory!
Or with respect to the housing bubble, again, completely block out all facts that indict the government such as the Federal Reserve's 1% interest rates under Greenspan and the fact that the companies who guaranteed the bad mortgages, Fannie and Freddie, were Government-Sponsored enterprises...again, COMPLETELY BLOCK ALL THESE INCONVENIENT FACTS THE F*CK OUT OF YOUR BRAIN IF YOU HAVE ONE and simply point out that we have a REPUBLICAN President at the time! Completely evade all intellectual argument about what the definition of "free market capitalism" actually is and make the argument about Republicans vs. Democrats. This was all the GOP's fault, damn it!!!! Down with the rich!!!! WHOOOOO!!!!
If you've gotten this far and your "friend" still isn't convinced that left-wing intellectual conformity is the only way of life for him, the next step is to start spamming his Facebook feed with pictures of all kind of carnage and gore. The Hiroshima explosion...dead babies...vieos of baby chickens being ground up in a meat factory.........IS THIS THE KIND OF WORLD HE WANTS TO LIVE IN????
Finally, if he still refuses to admit defeat, you're going to have to call him a RACIST. Wait, this is actually the first thing you were supposed to do, my bad. Say stupid ass shit like the following: "Why did you JUST DECIDE TO BECOME A LIBERTARIAN NOW when we have the first black President?" If he points out he wasn't even of voting age before the 2008 election, you're going to have to try harder to evade reality by making increasingly inane generalizations: "Funny how Republicans didn't have anything to say about the deficit when W BUSH was in office! Republican hate Obama because he's black!"
The key is to always erase the distinction between "libertarians" and Republicans. Take little bits of trivia that mean nothing and lead to no particular conclusion, like the fact that Paul Ryan claims that all his staffers are required to read Atlas Shrugged, and substitute that information for facts and logic. Always focus on politicians and media personalities, not ideas. Dig into Ayn Rand's personal background and blather about her sex life. Don't even bother to imply that this information is relevant to whether libertarian "works," because your opponent will just point out that it isn't. Just use red herring after red herring it to completely derail rational discourse. The goal is to make all political debate with you like one of those talking head shown on CNN where the pundits sit around and interrupt each other. When all libertarians are so sick of dealing with idiots like you that they completely refrain from voicing their stupid non-Krugman opinions, you've "won"...right?