The correct supply side action needed today is to reduce tax rates, especially for the wealthy, reduce capital gain tax rates, remove the stifling regulations and inject a sense of freedom and opportunity. This would increase output, grow the economy, reduce unemployment, eventually increase tax revenue, put downward pressure on inflation and finally end the “Obama Depression.”
The primary problem is government spending. That is what drastically needs to be cut. Contrary to conventional Keynesian wisdom, reducing government does not reduce economic prosperity. It may reduce statistical GDP, but it does not impoverish society. To the contrary, if the government spends less, resources are freed from government consumption to be used in productive investment. Such investment is a key source of economic prosperity. To truly increase economic output, therefore, we should cut government spending which would allow tax cuts to truly induce economic expansion.