This gets to the heart of one of my problems with libertarianism. If the government (or some other entity) isn't around to bail people out when they fail, then people will not become smarter, but they will probably become more cautious. This is not entirely good.
Ahh, but it's not government that bails them out. It's you (and you could easily still do it voluntarily without government interference and overhead). Government, with absolutely no constitutional justification -- and no source of income but your unwilling wallet -- assures your neighbor that he can take ridiculous risks, perform no due diligence, take no personal responsibility, and you will bail him out. The (undistributed) reward far outweighs the (distributed) risk. He has no incentive to "learn." And you have less money to pursue your own investments and innovations. What's that opportunity cost? We'll never know.
All human interaction should be voluntary. Stealing is immoral, whether perpetrated by you, or by your designated agents at your direction. It's still theft. "Doin' good with other people's money" isn't charity. And like anything else, when you subsidize recklessness, you only get more of it. And again, at the government-dictated cost of unknown lost alternatives. The free, voluntary market would decide what risks were worth taking without government force, and reward them commensurately. And far more accurately and efficiently than government ever could.
Look, the simplest way to respond is this: If you believe that the government which governs most governs best (and make no mistake, that's what you're advocating, because I guarantee you that each neighbor on your street wants government to start regulating something different because it's "dangerous," or insuring something different because they don't want to bear the inherent risk themselves), then we have a fundamental disagreement about the intended scope of this government, as well as the entwined sister concepts of liberty and responsibility.
But I trust we do agree on the fundamental rule of law, that we are a nation of laws, not of men. We ratified a Constitution to be that rule of law over "troublesome servant" government. And until you can point to the provision of that government-limiting Constitution that authorizes government to protect me from myself, or to restore me after my own mistakes -- as well as to steal from my neighbors to accomplish it -- you need to pass an amendment. The ends do not justify the means. "Common sense violations of the Constitution" simply don't exist. There is a process. To be a valid government function, you need an amendment. Once you have that, then we can address the whole "more government" thing...
"Still one thing more, fellow citizens — a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities."
First Inaugural Address (March 4, 1801)
Or, it's Not Yours to Give.