摘要：This paper examines how fiscal expansion influenced resource allocation during Japan's Lost Decade (1993-2002).  We document two key empirical patterns: a deterioration in the allocation efficiency of government investment, and a substantial increase in government borrowing driven by interest rate declines.  We develop a politico-economic theory of the fiscal curse of easy borrowing: relaxing government borrowing constraint induces allocation to become more politically driven than efficiency-oriented.  This mechanism is incorporated into a quantitative model calibrated to the Japanese economy, and we conduct counterfactual exercises to assess its quantitative effects. If the government had been forced to spend the extra borrowing revenue on consumption while keeping the shadow price of government investment intact, the allocation of government capital would have improved substantially, raising aggregate TFP by 0.43\% and welfare by 0.31\% during the Lost Decade.