Lets say for example that I have 10 stability.
The effects of a war cost me 8 gold which I don't have and the famine that round is -3 which I don't have either.
A. Subtract the 8 gold from my stability which would leave 2 but not actually reduce my stability because I know it is more. Stability doesn't move, right? Later during the famine (-3) which I also don't have, my stability is able to ignore this
B. Add both resources deficiencies (-11) and subtract them from stability (-1) which causes loss of VPs
"A" seems too easy even though getting high stability in a game can take quite a while to the detriment of other resources and "B" is also when all you lose is a few VPs.
Again I'm probably missing something.
Stability indeed partially mitigates the effects of the war. You lost the war, so you lose 1 victory point (stability can't help here). Now to the gold penalty: you don't lose any gold because your stability is superior to the penalty. Your stability remains at 10. Would you have had a stability of 7, you would have lost 1 gold.
Stability has no influence on the famine. You have to pay 3 food no matter what. Since you don't have any food you lose 1 victory point and 3 books (if you don't have enough books you lose 1 victory point - again ! - and as many other ressources as the missing books).
In any case (war, famine), your stability remains unchanged.