The Germans have a strong fleet to start with, and a better air force. They do NOT have to spend as much as the Allies to maintain superiority. It is easier and cheaper to build a defensive fleet than an offensive one, but the German fighters give the German navy an added punch.
On the other hand, if Germany spends any sort of serious resoruces on ships and/or an industrial complex, Russia is going to be very strong, and Germany has to race BOTH the Allies. Add to that the fact that if the Allies position their navy correctly, the German navy will have to commit to attacking the Allied fleet before it can reach full power, but the weakened German navy will then be far more vulnerable to an air attack.
Let’s say you had an African bid (German fleet unificaiton is very costly otherwise because of Anglo-Egypt). German takes Anglo-Egypt and Gibraltar, and attacks the UK Gibraltar battleship with battleship, sub, and transport (for Gibraltar), possibly a fighter or two. The UK destroyer at the Med is now stranded, and UK fighters from London cannot hit the Mediterranean fleet because of a lack of landing space. If the Germans built a Baltic carrier for protection (which I do not necessarily say is a good idea), and put only four fighters land in Western Europe, the Allies cannot stop fleet unification except at a heavy price. If the Allies put a USSR sub west of Algeria, it’s just cleared by the W. Europe airforce. If the Allies put the entire Allied fleet of 4 trns, 1 sub, 1 btl west of Algeria, this is crushed by Germany’s 1 trns, 1 sub, 1 btl, 5-6 fighter and bomber.
So assume the Allies run away, and the Germans can unite their fleet at West Europe, which will now be 2 trns, 3 sub, 1 destr, 1 carrier, 2 fighters, 1 battleship. Now what? If the German fleet stays west of W. Europe, US can build an air force and fleet, unite with UK elements. Germany can smash that first fleet as soon as it comes within 2 spaces, but then Germany’s fleet is far away from reinforcements and also vulnerable to a massive US air attack. If Germany doesn’t smash that first fleet, the Allies just build it up until the Allies can smash the German fleet. (What else do the US and UK have to spend on?)
US already starts with 2 destroyers and two transports, as well as probably three fighters (Hawaii, W. US, E. US) and bomber (E. US). The UK starts with a battleship and 1-2 transports (but if the Germans attacked a UK transport, it will lose a sub to UK air). USSR has a sub. So you already have a defensive fleet of 4 trns 1 sub 2 destr 1 btl without the Allies spending a single IPC. Two subs and a carrier make the Allied fleet STRONGER on defense than the German fleet’s defense, and just a few subs and carriers or battleships or fighters allow the Allies to even attack (a multinational force is lousy for attacking, but good on defense; in this case, though, US can ramp up production very quickly and become a real threat).
All this could possibly be countered by Germany, but factor in the USSR bashing down the door in the east, and the fact that Germany can’t seriously threaten anything with the German fleet, and the fact that the UK and US really have to worry about building anything but navy/air (because Germany should not be able to invade London against a good Allied player, so the US and UK can produce almost nothing but ground and air).
You could say that Japan might attack the US, but that means less pressure on Russia, and the US can easily counter, even while maintaining a defensive fleet in the Atlantic.