I'm trying to develop an investment thesis, based on my pessimistic outlook for the future of much of the population of our country (sorry if that ruins your day if you're a blind optimist). Unlike myself and my wife who will retire in another 6 years very financially secure because we are lifelong savers/investors/people who lived far below their means, I see a huge number of people who live paycheck to paycheck and don't save a dime. With pensions being a thing of the past, and no savings, I see a future with an enormous poor class. And with all the pessimism surrounding social security and an indebted federal government, how are these people going to exist? Eat grass and sunshine, and live in trees?

Since I cant imagine our government doing anything aimed at stemming the tide of this rising problem, I'm certain the day of reckoning will arrive. So in a democracy where people can vote for the entitlement candidates (they'll all be if they want to be elected) I'm reasonably sure there will be government sponsored housing for the masses - funded by confiscation of wealth from the super rich and an overbearing tax system. Sorry, I'm not trying to turn this post into a political statement, just trying to look into the crystal ball.

So the will be plenty of losers in this scenario - but that means plenty of winners who capitalize on opportunities this scenario brings. One could easily conclude that construction companies who profit from building such government housing will be big winners, but that's to easy and predictable. What other opportunities will emerge? Maybe there will be big losers created by this future, and betting the short position is the opportunity?

How are these people going to exist?

On Social Security and other government programs, of course.

Of course, these programs won't be the way that they are, now. SS will have an income test, so that people like you and I won't get much (if anything), so that all those that didn't save can be supported. Other important programs will be raided to pay for spreading the wealth. And business will have to pay a larger and larger share.

But the stock market will continue to go up, and there will be opportunities there.

Inevitably, a question such as the one you pose leads to a political question, but it really isn't. It's purely an economic and fiscal question that's clouded by the politics. There will never be a confiscation of real wealth to give to the less fortunate as the system will prevent that from ever occurring. Here I refer to the 1/2 of 1% who controls about half of the nation's wealth. Most people who post here, even if they're millionaires, don't fall into that demographic. Where wealth be be confiscated is among the middle class and that's designed to keep enough tension among those who really have common cause so their attention is diverted from the issues at hand. Partisan politics serves that purpose very well with fights over things that are almost always meaningless.

The economic changes that the nation have undergone have centralized wealth while shifting jobs abroad. This has been a multi-decade phenomenon fostered mainly by free trade and made worst by the financial collapse of 2008. Fiscal mismanagement is rife, not necessarily because of welfare given to the poor, which accounts for a very small portion of federal budget expenditures, but by the corporate welfare doled in various forms. Basically, the treasury has been raided.

Yes, there are people who have been totally irresponsible and who have lived beyond their means with mindless consumption. They have no excuses, but much of this has been encouraged by the media and today's culture that focuses on "bauble" acquisition. This has been a wealth generator for those who've encouraged this at great expense to those foolish enough to buy into this and to the nation at large.

At this current pace - if it keeps up, I don't think I'll be living in the us my whole life, just like V.

Perhaps identifying and buying a home or two in a country you'd be comfortable in would be a good start. As far as taking advantage of this pending downturn that, imo, has been miraculously been staved off, likely by large amounts of unknown manipulation.... identify what will crash and take advantage of it as best you can.

Catfish,

I'm focusing on doing RE in my Roth IRA. Profits never taxed. (until they change their mind!)

My buddy just came back from Costa Rico. He talked with several people who gave up their US citizenship in order to make money and not pay US taxes on it.

Plus the cost of living was low.

Another buddy got a govt job - best job security ever!

Nursing homes will be in greater demand.

When your kids put you in an old folks home, may you own it free and clear!