When a California bond trading magician and a conservative Texas financial writer open general sessions at a financial conference by quoting Lenin and Marx, one might presume something is rotten in more places than the state of Denmark, where one-year government bonds recently boasted negative yields. But they are exactly whom online newsletter editor John Mauldin and DoubleLine Capital CEO Jeffrey Gundlach quoted at the third annual Innovative Alternative Strategies conference in Denver in late July.

Both of these two serious thinkers addressed a series of issues that have come to dominate the national dialogue, offering different perspectives on what is emerging as a general consensus that something is profoundly wrong. For starters, the average American male has seen his real income decline since 1973.

Though Marx died in 1883, he lived long enough to grow displeased with how many were interpreting his ideas. Explaining how frequently human events can turn in a direction very few expect, Gundlach quickly moved on to another discredited economic practitioner, Herbert Hoover. In his memoirs, the former president described the world's shock at the outbreak of World War I. After 50 years of peace, the "evil spirits" that erupted in 1914 caught many sophisticated observers, Hoover included, off guard.

Change and innovation can sometimes bring societal structure and property relations into conflict with each other, Gundlach said, adding he wouldn't be stunned if the current austerity policies being implemented in Spain, where youth unemployment exceeds 50%, and Greece ignited civil wars. While both keynoters devoted a major part of their talks to Europe, Gundlach noted that pockets of America are displaying the same symptoms as the continent across the Atlantic. Detroit has halted street repairs and is turning lights off in 60% of the city.

Exacerbating these issues is that both the U.S. and Europe have tried to maintain an unnatural level of stability "with guardrails of debt." Between 2002 and 2010, the financial markets bought into former vice president Dick Cheney's theory that "deficits don't matter," Gundlach argued. Then two years ago, markets decided that "it is a real problem."

Myriad sovereign debt crises may have jolted today's generation of investors, but both speakers maintained they were hardly new developments. Greece has spent nearly half the last 210 years in default or restructuring while Germany spent about 12% of the same period in a similar state.

Since the advent of the euro, Germany has embarked on "a solo journey to full employment," Gundlach declared. Producing a chart comparing 20 years of industrial production in Germany and Italy, one could see the two nations marching in lockstep until 2000, when German manufacturing took off while Italian production entered a period of secular decline. In retrospect, one reason the new currency was so beneficial to Germany was that the deutsche mark was undervalued at the euro's inception, while many other euro zone nation currencies were richly priced.

Meanwhile, scarcely a week goes by without some minor and major scandal-from Libor price fixing to HSBC's money laundering to Peregrine's and MF Global's disappearing client funds to JP Morgan's London whale-spawned from the financial business, Gundlach noted. Two days after he spoke, Knight Capital's new software program ran wild and the brokerage firm couldn't turn it off. U.S. investors and regulators simply yawn as they "collectively hold their hands over their ears," Gundlach argued.

The economy and financial markets aren't the only locus of social imbalances. Since 1960, the top 0.01% of the population have seen their effective tax rates fall by about 50%, while those taxpayers in the 40th through 80th percentiles saw their taxes rise slightly, Gundlach claimed.

"You could see a humongous tax increase in the next four years," he said, if the "Taxes Are Too Damn Low" Party gets its way against the "Spending Is Too Damn High" Party. "Stocks with huge embedded capital gains could get hammered at year end."

Rebounds from recessions have grown weaker and weaker since the U.S. embarked on its epic debt binge in the 1980s and "started borrowing and giving it to the rich guys," Gundlach contended, adding that borrowing and squandering might be a better term. "Property relations really aren't working. No wonder we can't get along."

In such an uncertain world, Gundlach believes investors can be successful if they can position their portfolios for several different scenarios. Those scenarios include inflation, deflation, continued anemic growth and a global financial crisis.

Lenin was only one of two leaders of the late Soviet Union to graduate from a university and Mauldin began his talk by citing his remark that there are "decades when nothing happens and weeks when decades happen." In 2001, for example, the euro enjoyed a successful debut within months of the September 11 attacks and China's admission to the World Trade Organization. All three events are still profoundly affecting our lives today.

Mauldin's focus was on the endgame of a 30-year debt super cycle and the resolution of the debt crisis and the chronic federal budget deficit in America. "If we [the U.S.] can get through the deficit crisis, we can still be the biggest, baddest dude on the block," he said.

In contrast, Europe is "screwed." Mauldin believes the continent faces nothing but downside. "We have a choice with potential upside," he contended.

Mauldin believes that the upcoming presidential election will be the most important since 1980. The challenge is whether the U.S. adopts a European-style program that reduces market-oriented incentives or embraces a pro-growth agenda. "Both views have their detractors," he noted. "I'm pro-market, but I get that there are unequal outcomes and not everyone gets treated fairly."

But the issue of fairness cuts many ways. "We've told an entire generation that if they get an education, they'll get a job," Mauldin, a father of seven, remarked. "I lied to them."

What many unemployed young people around the world are discovering is that they need a skill, not an education. When you hear businessmen saying they can't find employees, what they mean is they can't find workers with the right skill sets. Why can't we allow businesses to hire young people for $4 an hour to let companies train them?

Looking at the audience of advisors, Mauldin said, "You are old. You should retire. But 3.4 million jobs since the recession have gone to baby boomers taking jobs from younger people."

Coming at the same problem from a different angle than Gundlach, Mauldin argued we are getting ready to rewrite the social contract in America. Citizens who still believe they will get the same Social Security, Medicare and pensions their parents received are deluding themselves.

Pensions were supposed to earn 7% or 8% a year, but for the last decade their returns have been closer to 1% or 2%. It's not only New Jersey Governor Chris Christie who is sounding the alarms about public employees' pensions. Mauldin cited the case of San Jose, Calif., where a Democratic mayor told firemen, teachers and policemen that he was going to cut their pensions and make them increase their contributions. When he put it to a vote, it passed by a 2-to-1 ratio.

"If we don't deal with the deficit, we'll become Spain or Greece before 2016," he predicted. The Simpson-Bowles budget commission produced what Mauldin termed a terrible "legislative" proposal and "I'd vote for it in a second" simply because it puts the federal budget on a sustainable glide path.

President Obama's indifference to the report of the deficit commission he appointed was unforgivable, in Mauldin's view, and is a primary reason he plans to devote most of his newsletter coverage in September and October to the election. At some point, supporters of entitlements will confront the reality that if they don't make major adjustments, they are waging a losing war against mathematics.

What remains so frustrating is that America's problems, unlike those of Europe and Japan, are not insurmountable. The 16% savings rate Japan enjoyed in 1989 has fallen to 1% and is about to go negative. When they cross that line, "that's when they will become a bug looking for a windshield to hit them," Mauldin quipped.

Demographics remain Japan's main problem, since that nation's population is scheduled to shrink by 30% over the next few decades and they refuse to admit immigrants. Still, there are glimmers of hope even there. Companies like Canon are moving production back from China to highly automated domestic facilities that are suddenly cheaper than those in mainland China.

One way Mauldin is studying investing in the insular nation is possibly going long Japanese exporters while shorting the yen.

With the exception of Germany and a handful of nations, particularly those in Scandinavia, Europe's prospects look grim. In an interview before he spoke, Mauldin noted that Sweden initiated entitlement reform after its 1993 financial crisis that could prove a model for other nations. It tied rises in entitlement spending to GDP expansion, thereby averting the situation where these outlays consume an ever-growing portion of a shrinking economy. Canada also followed this system later.

With its new Socialist government raising tax rates to 75% while lowering retirement age, France is likely to hit the wall in two years. Mauldin doubts Germany will bail them out. It's questionable if they even possess the means to do so.

In contrast, America is faced with many opportunities. "We could become energy independent" in seven to 10 years. Within a few years, the U.S. could be exporting $60 billion to $70 billion of gas annually, and that will make a big dent in our trade balance. Moreover, this country is exporting "more stuff than ever, we're just doing it with fewer people," Mauldin said.

For a man in his early 60s, Mauldin's portfolio reflects his long-term optimism about America's potential. He admits he is overweighted in private technology, biotechnology and venture capital.

But systemic problems persist. It's not clear that Mauldin and Gundlach would agree on much, but the fact that the U.S. government spends seven times as much on people over 65 as it does on people under 25 underscores a disturbing failure to invest in the future. And as the population continues to age, older voters will see their political clout increase until things reach a tipping point.