The Stability Treaty Would Have Done Nothing to Prevent Ireland's Current Crisis

That fact should have mentioned prominently in an NYT article discussing the debate over the adoption of the European Union's stability pact by Ireland. The pact only places restrictions on deficits and debt in the public sector.

However Ireland had no problem with debt or deficits in the public sector, it was running budget surpluses until the crisis hit and it had a very low ratio of debt to GDP. Ireland's problem was the buildup of massive private sector debt, which fueled an enormous hous...