THe other wars were a greater % of GDP.
“The sort of numbers mentioned in US discussions as to the military costs of the war are less than US$100 billion, that is less than 1% of GDP compared with 12% or 15% of GDP for the Korean and Vietnamese wars. ” – abc.net

“The second world war called for total mobilisation, requiring a country’s total resources, and that is what wiped out unemployment. …Most analysts put the total costs of the war at less than 0.1% of GDP, the highest at 0.2% of GDP. Much of that, moreover, includes the usage of munitions that already exist, implying that little or no stimulus will be provided to today’s economy. ” – The Guardian

Housing is now a hug epart of our economy. “…unlike the previous periods, housing is now the main engine of the economy. This is especially true when the substantial contribution of equity extraction to consumer spending is included.” A housing bust is therefore more serious than ever.

This is Roubini’s “Housing Free Fall Turning Into Meltdown … 2007 Recession Ahead”. Roubini has written about a housing-led recession since last spring. Have you read his work? It all comes down to the economic contribution made by housing and MEW, and the effect on GDP when residential investment falls. The data is all there.

Economists don’t question whether housing downturns lead to recessions. It is generally accepted as fact. The disagreement hinges on how bad this downturn will be, and whether it’s a hard or soft landing.

AN, I recommend you read Roubini’s well written blog, and then decide for yourself about the case of a recession. If you disagree with any of Roubini’s points, it would be interesting to hear.