NEW YORK, Oct. 16 (UPI) -- The federal government shutdown has cost the U.S. economy at least $24 billion, and probably more than that, Standard & Poor's Ratings Services said Wednesday.

In a release, the ratings agency said the shutdown, which began two weeks ago, "has shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth, or taken $24 billion out of the economy. However, the closer we get to breaching the debt ceiling, the higher we expect the economic impact to be."


The agency noted that the 2011 debt-ceiling standoff was associated with a 31-year low for consumer confidence, and said a major difference between the current budget and debt ceiling fight the 2011 fight is that "this round of debt-ceiling negotiations is occurring after two-plus weeks of a government shutdown" -- so the final cost to the economy "will likely be even more severe."

"While we believe the Senate deal will be passed and the debt ceiling will be raised, the impact of a default by the U.S. government on its debts would be devastating for markets and the economy and worse than the collapse of Lehman Brothers in 2008," S&P said.

The release said if the United States were to default on its obligations, there would be a "sudden, unplanned contraction of current spending," including a federal government spending cut of about 4 percent of annualized GDP.

"That would put the economy in a recession and wipe out much of the economic progress made by the recovery from the Great Recession," S&P said.