You have to have both. Even top GMs are going to make mistakes sometimes, and the easiest way to recover from those mistakes is to spend more money. For example, it's looking likely that the Lakers made a mistake by giving Bynum a maximum extension a full year in advance, when he had looked good for really only a couple of months. But because they're willing to spend luxury tax, they don't really have to worry about being trapped behind his contract. Counting luxury tax, Bynum is going to cost them $25 million next season, and most teams couldn't dream of affording him at that price. Put a "budget-conscious" team in the same situation, and they'd be making horrible cost-cutting trades, or facing letting Gasol go, or pulling their punches in the summer free agent market.
Going back a few years, the Suns made a mistake with the Quentin Richardson signing. But, while they were still willing to spend big money, they erased that mistake by swapping Richardson for Kurt Thomas. It was only once the purse strings were tightened that the wheels came off.