Yep, that worked just as you say: my blue blob is growing! Although now I also see the benefits of letting the Raj swallow everything: they get garrison duty, and with their massive manpower, they crank out tons of units. I’m still growing my blue blob, though. I really appreciate that tip. Makes the game a lot more fun.
I am still playing that USA playthrough, but I’ve also been trying Australia on the “nonhistorical” path option. (I’ve now bought all the DLC, so I get the Oz focus tree.) Great fun! Britain went Fascist, and I and the other members of the Commonwealth all declared independence. Now Britain is “The Allies” with Italy, while Germany is starting to swallow up its neighbors as “The Axis.” The US is neutral. Japan is locked in a civil war, so there has been no China war or war in the Pacific at all as of early 1940.
Britain is mad at me and its other former underlings, and they’ve justified a war against me – as have the Axis. So I think someone will declare war on me. I’m busy making destroyers with minelaying capability to try to protect my ports. The big challenge for Oz is manpower, but there are focuses and laws that ameliorate it somewhat.