When you’re behind on your bills and maxed out on your credit cards, more debt is the last thing you need. In Illinois, though, additional borrowing is being proposed as an answer to the state’s fiscal woes.

A retiree group called the State Universities Annuitants Association is suggesting that the state borrow $107 billion to shore up its severely underfunded pension funds.

This tempting but dangerous idea got a hearing last week before a legislative committee. The association produced a study by a math professor showing that Illinois could boost pension funding from 40 percent to 90 percent, cap its annual pension cost at $8.5 billion and save $103 billion over three decades.

Those numbers come from the magic of arbitrage. If you can borrow money at 5 percent, and invest it wisely enough to earn a 7 percent rate of return, you too can watch your debt problems melt away.

The state’s pension funds have, in fact, earned more than 7 percent over a couple of decades, and 5 percent is a reasonable estimate of what the state might pay today in a large, taxable bond offering. That 2-percentage-point arbitrage is no sure thing, however.

In fact, it’s a gigantic roll of the dice. Given today’s high stock prices and low interest rates, many experts say investors should expect to earn 6 percent or less on a diversified portfolio of stocks and bonds.

Moreover, as Monday’s market plunge reminds us, that portfolio will lose money at times. If we go into another bear market like the ones of 2000-02 or 2008-09, a leveraged bet on stocks will make Illinois’ problems worse, not better.

It’s also unclear how bond investors might respond. A $107 billion borrowing would be the largest municipal bond issue ever, by far. The state would probably pay a higher interest rate to move all those bonds, and rating agencies might downgrade the state’s credit. Illinois is already the lowest-rated state, just one step above junk-bond status, so a downgrade could have dire consequences.

Then there are the political questions. Assuming the bond-market fix works, would Illinois legislators leave well enough alone?

After all, we’ve seen this movie before. Illinois issued $10 billion of pension bonds in 2003 and earned positive arbitrage on the money, but the pensions’ funding status continued to deteriorate. The Legislature used the new money as an excuse to cut its pension contributions.

We’re told the current plan would cap, not cut, contributions, but what’s to stop future legislators from falling back into their bad old habits?

Scariest to contemplate is the scenario where the gamble doesn’t pay off, the economy deteriorates and the Legislature is forced to choose between slashing basic services or defaulting on the bonds.

“It’s very possible you would end up losing money on this,” says Andrew Biggs, a pension expert at the conservative American Enterprise Institute. “Stocks aren’t guaranteed. This is a Hail Mary plan written by people who are financially illiterate.”

Imagine how much tut-tutting a poor Illinoisan would hear if his or her self-improvement plan consisted of maxing out a credit card and taking the money to a casino.

Legislators would be better off doing what some spending addicts have done instead: Freeze that credit card in a big block of ice. Save the state’s borrowing power for future needs, while making tough budget decisions to escape the hole they’ve dug for themselves.