Default Could Cost New York $2 Billion

This article was written by David Reich-Hale.

Gov. Andrew Cuomo said this week that if the federal debt ceiling isn't increased by month's end, it could cost New York up to $2 billion.

"Congressional dysfunction has already hurt New York and the nation's economies by fueling a lack of consumer confidence nationwide," Cuomo said in a statement. "Jeopardizing our full faith and credit is a new level of recklessness and irresponsibility that would have dire consequences and could cause irreparable damage to our economy."

Cuomo added that if the debt ceiling isn't increased, it would damage state revenues and would lead to sizable job losses throughout all sectors, most notably private employment because a default has the potential to cause another recession.

The governor added that the default of federal debt would ripple through the municipal bond market and that New York's borrowing costs would increase substantially.

The federal government won't act on raising the debt ceiling as long a it is shut down. 

President Obama and congressional Republicans on Thursday both said it was imperative the debt ceiling issue was resolved, and were negotiating to end a shutdown that has lasted 10 days.