The fool has said in his heart, There is no God

This paints a picture of a corrupted world where God looks down and tries to find a good person but finds it hard to find any. In particular the people have become foolish by saying that there is no God. Then they will be judged by God who scatters them and despise them.
The context of this could be pre-captivity or during the captivity of Judah by Babylon. This was the event that truly scattered the nation of Judah while the nation of Israel had already been scattered one generation ago. But the psalm end with a positive note that salvation would come and the captives be brought back.

Psalm 53
–To the Chief Musician. Set to “Mahalath.” A Contemplation[a] of David.

 1 The fool has said in his heart,
         “There is no God.”
         They are corrupt, and have done abominable iniquity;
         There is none who does good.
        
 2 God looks down from heaven upon the children of men,
         To see if there are any who understand, who seek God.
 3 Every one of them has turned aside;
         They have together become corrupt;
         There is none who does good,
         No, not one.
        
 4 Have the workers of iniquity no knowledge,
         Who eat up my people as they eat bread,
         And do not call upon God?
 5 There they are in great fear
         Where no fear was,
         For God has scattered the bones of him who encamps against you;
         You have put them to shame,
         Because God has despised them.
        
 6 Oh, that the salvation of Israel would come out of Zion!
         When God brings back the captivity of His people,
         Let Jacob rejoice and Israel be glad.