NY Governor Andrew Cuomo
ALBANY – Governor Andrew Cuomo has outlined the economic cost of a Federal default on New York, including serious potential damages to the fiscal health of the State that would undermine the economic progress it has made in the last three years. According to the governor, a default would be unprecedented, but data from past recessions suggests that the State’s revenue loss could be as high as $2 billion.
Earlier this week, Cuomo said that New York’s economy has gained over 300,000 jobs since the start of 2011. In addition, the State has passed three on time budgets with a bi-partisan legislature resulting in New York’s credit’s outlook being by recently raised to positive by Moody’s Investor Services and Standard & Poor’s. Economists believe that a default could trigger a national, if not global, recession.
The governor and other state officials believe that the impact would setback much of the progress New York State has made. This includes a significant negative impact on State revenues and sizable job losses throughout all sectors, most notably private employment because a default has the potential to cause another recession.
Cuomo said that a failure to act in Washington would put the national economy at risk, jeopardizing New York’s significant recovery and leading to additional fiscal pressures. New York is the epicenter of the financial services industry, which is still recovering from one of the most cataclysmic periods in its history. A default of federal debt would reverse the progress that has been made and impact Wall Street profitability, employee compensation and, as a result, State revenues.
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