“Let’s be blunt and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican Party,” he said in a speech to a conference in Sydney.

The Republican Party’s position on the country’s budget had led a year ago to the deadlock in negotiations, Mr Swan said, to prevent the looming “fiscal cliff” – nearly $600 billion in planned spending cuts and tax hikes that will bite early next year.

“Despite President Obama’s goodwill and strong efforts, the national interest there was held hostage by the rise of the extreme Tea Party wing of the Republican Party,” he said.