Nation: Bust Town?

A continent away from Atlanta, the steel skeletons of San Diego's new skyscrapers stretch above the immaculate white city that curves back from the Pacific toward the Laguna Mountains. The yacht basins are crowded with boats; sumptuous motels for sybaritic tourists are rising outside town. But beneath the clamor and the glitter, San Diego—the city that brashly bet heavily on the aircraft industry and cleaned up for nearly 15 years—is in missile-age trouble.

World War II turned San Diego from a city of 289,348, sleepily content to live off its famed naval base, into...

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