This is a great thread.
The obvious answer is that Germany lost WWII because it went to war with a combination of other Great Powers that were vastly stronger than Germany and its Axis partners. There is good economic data available for the major combatants on Wikipedia (citing Harrison, Mark,
"The Economics of World War II: Six Great Powers in International Comparison", Cambridge University Press (1998)).
Using the years 1941-1943 as the comparison period:
- The overall GDP of the Axis (Germany-Austria-Italy-Japan) was only 41% of the overall GDP of the Allies (Britain-US-USSR).
- The overall GDP of the European Axis (Germany-Austria-Italy) was 88% of the overall GDP of the European Allies (Britain-USSR).
Put another way: the addition of Japan to the Axis increased Axis resources by about 33%; while the addition of the US to the Allies increased Allied resources by about 287%.
Or put yet another way: the combined GDP of the Axis was about 63% of the GDP of the US alone.
This data shows that Germany's biggest single error was needlessly declaring war on the US. If Hitler had denounced the Pearl Harbor attack and declared that he wanted peace with the US, it is difficult to see how Roosevelt could have prosecuted a war against Germany and Italy at all, much less adopted the "Germany First" strategy. Also, it is difficult to see how Lend-Lease could have been continued at any significant level, if the US had been at war solely with Japan.
Without US involvement, there would have been no Torch in 1942; probably no British victory at Alamein in 1942; no knocking Italy out of the war in 1943; and no Normandy invasion in 1944 (or ever). Germany could probably have fought the Soviets to a stalemate on the Eastern Front. British action would have remained at the nuisance level for Germany.
Germany's second major error was overextension, especially on the Eastern Front, culminating in the disaster of Stalingrad. But even with this error, I suspect that German resources would have been sufficient to ultimately stabilize the front, without the drain of US attacks on what were really three fronts: the Western Front in France; the Southern Front in Italy; and the Air Front over the skies of Germany itself.
This is not meant to denigrate the contribution of the British Empire or the Soviet Union to victory over Nazi Germany. The Soviets suffered the worst losses (by far), and inflicted the most damage on Germany (by far). The British contribution was significant and heroic. But I don't think that Hitler could have avoided war with Britain and the USSR. From everything that I've studied about Hitler, the conquest of Poland and the western USSR was his obsession and his principal goal. That goal made his war with Britain and the USSR inevitable. My proposition is that Hitler's Germany probably could have won WWII by avoiding his fight with the US.