as some mentioned, the morgenthau-plan is just genocide.
could the western allies do it? yes - partly they did it - directive jcs1067 didn´t care about the germans, they even did not give enough food as they could (americans)... so yes, partly and in a very small way they did what morgenthau planned.
high morale ground isn´t important - if you are the winner, you can do what you want. hitler did this in poland and every area he reached... he collected jews and gassed em
here the western allies take the germans and starve em. we can discuss such a timeline, but if one try to excuse or defend it,well it is the same with one who try to defend ausschwitz or treblinka... at last in my opinion such things cannot be explained.
the "interesting" part is the negative effect to the rest of the world - as i wrote, the americans, french and brits would be morale pariahs, forever... just like the nazis, but this time bigger - cause they did it without the evil ideology behind it. massmurdering childs and old or ill wimen never can be justified. but this would happen - sure, some would say "they", the nazis deserve it.
but from a morale point of view, western "civilisation" had been gone, communism would be much more attractive.
the area, formerly known as germany would be under permanent heavy guard... at last the western part. no democracy, no economic improvement. just think about "hitler wins and slaughter the slavs"... but this time the americans are the killers.
if a jewish president of the usa does this, no support for an israel would exist, jews would be (sadly) seen as even more brutal killers as the nazis... jew would replace the word nazi in modern times... so the holocaust survivors would be fucked a second time...
economically central europe, western europe would be in a BIG mess... for a LONG time...
eastern europe would be the moral high standard area... at last these nations do not kill millions of people by starvation under a jewish president - maybe general thinking in the world would be "was hitler right about jews"? you can understand how negative this would be...
also - what would they do with this peasants germany? how will you bring in democracy in a nation, you actually killed nearly half of them? how will you react with "rearming", just think about 1955... if germany will be a democracy, they just say "go away"... if the allies have a military dictatorship established (by the americans, brits and french roll over because they couldn´t go on longer), say like cuba, all negative aspects will be created... the allies have to build a wall, to stop germans to flee to the gdr...
no, the impact of this would be - in economical and morale things very bad for the americans. america would be another word for genocide. Sure, you make buisness with such scum, if you have to... but think about the moment, the usa is weak... the UN is gone (just think about a worldwide meeting with nazigermany beeing the leader nation, discussing things like "justice for uganda"...

no way)
so we have
massmurderer of unknown brutallity by a nation that need so urgently to be "the good one"
economic deasater with the americans in the need to pay for the european nations for 30 years longer... if they do not they turn red, so they have to pay and pay and pay and pay
israel is in a much worser situation if morgenthau will be president
russia will be the "good guy", in any circumstances, esp. after 1953...
eastern germany (the russian colony) will be stronger, a lot western germans have resettled to it, also the smart (surviving) people, so the russians will have a big push...
the usa have to fight its cold war alone (with UK), no german army to be cannonfodder... the chance to loose a democratic germany to socialism is big, if the us government changes, the shame about the american crimes easily could allow the reunification with the russian part, so the surviving germans (around 40 million) will have the chance to be the socialist engine... with germany totally red, other nations could fall, too.
or to say it short:
it would be the most stupid event in human history, next to the most evil crime...