And now, my friends, I present you with the ultimate irony.

The Knicks, who for years have spent like drunken sailors to acquire even the most marginal prospects, are now in such a dire financial situation that they can’t afford to keep a player who is both inexpensive and productive.

Yesterday, news leaked that the Knicks would not match San Antonio’s three-year, $7 million offer sheet for center Jackie Butler. Reasoning that it was too much to pay for a third-string center, especially since the cost would double to $14 million after factoring in the luxury tax implications, New York decided to let the 6-foot-10-inch, 260-pounder head for Texas.

The Knicks are giving the outward impression of finally having had a moment of clarity and making a rational, grownup decision about how to spend their money. In reality, this was another enormous personnel blunder that, much like the Eddy Curry trade a year ago, could end up haunting the team for years.

Butler went undrafted and was nominally the Knicks’ third-string center last season, which has prevented most observers from understanding just how good he is.When Larry Brown called him the Knicks’ best center last season, a lot of people wondered if the coach had finally gone off the deep end. In reality, this may be the only sane thing Brown said or did all season.

Look at the numbers. Last season, the 20-year-old Butler — the Knicks’ youngest player — shot 54.4% from the floor and had the team’s second-best perminute rebound rate (David Lee was first).His 15.4 points per 40 minutes were well above average for a center, and notable in light of the high percentage he shot. Overall, his Player Efficiency Rating (my per-minute rating of a player’s statistical production) of 14.67 was near the league average of 15.0 and ranked 22nd among the 62 centers who played at least 500 minutes last season.

That’s not a fluke, either, based on what he did a year before in the CBA. Yes, it was the CBA, but Butler didn’t just play well — he dominated.At 19, he was easily the best player in that league, which was why since-departed scout Dell Demps recommended him to the Knicks in the first place. (Incidentally, Demps is now the Spurs’ personnel director. For all the Larry-told-his-friend-Gregg-Popovich-to-sign-Butler theories floating around, this connection seems a far more obvious one.)

Butler’s current production alone would make him worth much more than the pittance for which San Antonio stole him.In a league where mediocre centers like Sam Dalembert and Nene (and, um, Eddy Curry) are pulling down $60 million deals, Butler would be worth at least a team’s midlevel exception — just as other middling centers like Nazr Mohammed and Joel Pryzbilla received in recent days.

The big story, however, isn’t what Butler is doing now, it’s what he’s likely to do in the future. Big men who demonstrate a knack for scoring at a young age almost never fail, and when they do it’s usually due to such factors as conditioning or injuries.

To see what I mean, let me introduce you to a tool I’ve developed that ranks players according to how similar they are.I use a number of criterion — height, age, and several barometers of statistical performance. According to this method, the five most similar players to Jackie Butler at the same age were Shawn Kemp, Eddy Curry, Jermaine O’Neal, Carlos Boozer, and Chris Webber.

Of that group, only Curry has failed to become a star, and he’s been held back only by a lack of conditioning and a bad heart. So basically, the worst-case scenario is that Butler would become as good as the Knicks’ current center — and cost about a fifth as much.

Yet the Knicks wouldn’t agree to pay him $7 million over three years, only slightly more than they’ll be paying firstround mystery man Renaldo Balkman. That isn’t prudence folks — it’s insanity.

Amusingly, the Knicks reportedly were shocked that Butler received such a “big” offer from San Antonio. That proves to me that the Knicks genuinely had no idea what they had in the youngster, because I was surprised he got such a small offer. I figured Butler would get close to the mid-level exception and would be limited to that only because of his restricted free agent status.

Even at that price, the Knicks would have ended up with a rare bargain amid a sea of salary excess. Instead, they’ll spend close to $100 million on the contracts of two players — Curry and Jerome James — who will probably be less effective than Butler this year, and almost certainly will be three years from now. Curry at least has ability on his side, but he remains a question mark. James can’t play at all, of course, and it’s troubling that New York’s brass actually had Butler behind him on the team’s depth chart.

Butler, meanwhile, is likely to take another step forward in his development as a high quality low-post scorer. Yes, his conditioning is a concern, and he’ll probably never make the All-Defense team, but as a 20-year-old he sure looked like the new and improved version of Curry — armed with similar size and skill but a much better motor. His departure leaves one more gaping wound for whomever succeeds Isiah Thomas to heal. When the Knicks announced Isiah would be taking over as coach, I hoped that at the very least, the new responsibilities would distract him from inflicting further ruin upon the franchise as general manager. No such luck.

For San Antonio, it’s just one more personnel coup. Yet again, the Spurs have nabbed a good young player for peanuts while other league executives have their fingers up their noses.

It’s instructive to note that the Knicks and Spurs operate at opposite ends of the spending spectrum — yet the team that spends less continually outfoxes the guys with the deep pockets. That, in a nutshell, is why the Spurs will again win twice as many games as the Knicks while spending half as much money.

jhollinger@nysun.com