I totally agree that A.Rand is a poor novelist. I don't know how people can wade through those works. LOL I did give it the old college try (back in college even), and just couldn't get through it.
And, since I'm no expert in Rand (or that brand of libertarianism per se), but I have no idea what in these policies would lead to genocide either.
Largely because all forms of libertarian policy (as far as I can tell) focus on inalienable rights that would be protected by government (and largely ungoverned otherwise -- as per bill of rights).
That being said, the authoritarian theocon agenda could lead that way in it's most extreme forms (i don't think the parties or government would allow it to go to it's most extreme forms). So perhaps peggy was confusing libertarians and theocons?