Continuing from @Opanashc
The "TAILS" of the USA and even the UK/Commonwealth were huge, we are looking at 1:7+ ratios for USA and 1:6 ratios for UK/Commonwealth.
For USSR this was very very less, something like 1:2.5 from what i recollect, Germany also had something like 1:3.
All this means - that 1 Million manpower was not equal for all states, however i have a eerie feeling we have discussed all this before and no conclusions or agreements came out.
Your idea is excellent in theory, but the problem is in execution. For this, we need - separate "divisions and abilities" for all majors giving each major its own advantages and dis-advantages.
Also, the casualty threshold is different for each major and this needs to be showcased, unfortunately such hard-coded rules will result in a lot of opposition and also "restrict gameplay".
Eg: Losing a million+ for the USA/UK or Western Allies is an absolute catastrophe which will result in wholesale change in outlook, for Germany and Japan it is a disaster which can be salvaged, for the USSR it is a tragedy which can be overlooked.
For a minor- inc. Italy it is GAME OVER.
I don't know if democracies having less tolerance to casualties would require a meta game balancing act.
To another poster, I don't think Britain should be considered overseas to Europe. I imagine it should work as more of a continent situation like in EU4. In EU4 the world is broken up into continents, and this creates the overseas ideas.
Germany losing 50 divisions in Iraq is going to be quite a blow compared to say losing 50 divisions in Poland. People are going to say, regardless of political affiliation "Why the hell are we losing that many men in Iraq".
Proximity is typically the best drum of war. A neighbor even if it isn't a threat, can be made to look like a threat more more easily than some third or fourth rate power half way around the world. You have to jump through a lot of hoops even as Hitler to justify the loss of a million men in a place like Iraq.
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