Is Axis and Allies 1940 Balanced without National Objectives?
First, it is not particularly clear that A&amp;A 1940 was balanced WITH all the rules - the changes in the second edition (unless you were referencing that) do in most people's opinions contribute to balance (VCs for Axis and setup changes).

Even with that, though, the NOs do contribute to game balance pretty greatly. Note that they are not symmetric - the US for instance purely gains income when at war, whereas Germany has both peace and wartime NOs. The loss of US and Soviet extra income will definitely be detrimental to their cause. Replacing NOs with free income is a reasonable idea, especially given how nebulous NO "hardness" is, but make sure to not just add it all the time - add NO income when appropriate (when at war, with who, etc).