I: Investment
P: Private income
C: Private Consumption
T: Taxes
G: Government Spending

Indeed lowering G is the only way to increase investment in this model.

Assumptions:

1- The economy is closed.
2- Taxes are the only source of income for the government.
3- G represents only government consumption and not government investment.

With this in mind I have a few propositions:

1- Consider lowering government spending on not productive areas such as defence, unemployment subsidies and pensions (careful the last one though; raising the retirement age might be a solution, but better to make sure that in comparison to average life expectancy your retirement age is quite a ways lower). Lower eduction spending on the other hand might be a short term solution but will hurt long term development given a loss of positive externatilities and underconsumption.

2- Consider gaining more income from state-owned enterprises. Given that the income from a state owned enterprise depends on C, we would not affect private saving and thus investment by having some of the government income be derived from it, given that the soe is simply capturing some of the profitability of a given sector. They could start by nationalizing some natural monopolies to start with, since they, in absence of strong but costly regulation, would probably be overcharging anyways. Even assuming no price change, at least the income can now be used to lower the burden of taxation and increase investment.

3- On the long term, consider eliminating the debt and accumulating reserves. When a recession hits the reserves can be used to stimulate demand, without burdening future growth too much because of interest payments included in G.

I: Investment
P: Private income
C: Private Consumption
T: Taxes
G: Government Spending

Indeed lowering G is the only way to increase investment in this model.

Assumptions:

1- The economy is closed.
2- Taxes are the only source of income for the government.
3- G represents only government consumption and not government investment.

With this in mind I have a few propositions:

1- Consider lowering government spending on not productive areas such as defence, unemployment subsidies and pensions (careful the last one though; raising the retirement age might be a solution, but better to make sure that in comparison to average life expectancy your retirement age is quite a ways lower). Lower eduction spending on the other hand might be a short term solution but will hurt long term development given a loss of positive externatilities and underconsumption.

2- Consider gaining more income from state-owned enterprises. Given that the income from a state owned enterprise depends on C, we would not affect private saving and thus investment by having some of the government income be derived from it, given that the soe is simply capturing some of the profitability of a given sector. They could start by nationalizing some natural monopolies to start with, since they, in absence of strong but costly regulation, would probably be overcharging anyways. Even assuming no price change, at least the income can now be used to lower the burden of taxation and increase investment.

3- On the long term, consider eliminating the debt and accumulating reserves. When a recession hits the reserves can be used to stimulate demand, without burdening future growth too much because of interest payments included in G.