Federal Treasurer Wayne Swan has delivered a speech labelling some elements of the United States Republican party as "cranks and crazies".

Mr Swan's speech at the Financial Services Council breakfast in Sydney comes less than two months before the US election.

His speech referred to political gridlock over spending cuts and tax increases due to kick in early next year, which could tip the US economy back into recession.

"Let's be blunt, the biggest threat to the world's biggest economy are the cranks and crazies that have taken over parts of the Republican Party," he said.

"Despite (US president Barack) Obama's goodwill ... the national interest was held hostage by the rise of the extreme right Tea-Party wing of the Republicans.

"There can be few things more alarming in public policy than a political group which was genuinely prepared to see the government of the United States default on its obligations in order to score a political point."

Mr Swan says global markets are nervously watching hardline elements of the Republicans for signs they will block reasonable attempts to support growth.

"The congressional budget office estimates that currently legislated spending cuts and tax increases amount to a fiscal consolidation worth around 5.1 per cent of GDP in the 2013 calendar year," he said.

"If that occurred, that would tip the US economy back into recession.

"With the world watching, it is imperative that the US congress resolve an agreement to support growth in the short term."

It's an unusual intervention in that Australian governments usually stay clear of intervening in overseas politics particularly when that country is in the middle of a presidential campaign. It will be interesting to see how Washington, or parts thereof, respond to these comments, if indeed they care to. Political correspondent Latika Bourke

Mr Swan says the two biggest risks to the global economy are Europe and the fiscal cliff in the United States.

He says Australia, however, is well and truly on the road to recovery.

"In the US, as in Europe, we have seen the political gridlock, excessive public debt and no room to move on interest rates, leaving the US central bank to respond with unconventional monetary policy," he said.

"Here in Australia, the grass is much greener. We are clearing some of the major hurdles in the global recovery but have still a long way to go to the finish line.

"We are growing around trend, our net debt is around one tenth of the level of the major advanced economies as a percentage of GDP, and we are coming back to surplus, before every single one of the major advanced economies."

Opposition Leader Tony Abbott says Mr Swan should do his own job better, rather than worrying so much about criticising the US Republicans.