The headlines declare that General Motors is “recovering.”

Despite continuing to lose money at what historically would have been identified as an astronomical rate, the auto company is losing less money and doing so at a slower pace than was the case a year ago.

So Obama administration aides now say they are “encouraged” by what the New York Times refers to as “signs of life” on the part of a company that many thought had “problems (that) were too big and numerous to fix.”

Things are going so great, chirps G.M.’s chief executive Fritz Henderson, that he suggests that returning to the days of big bonuses for corporate executives is again “an open question.”

But GM’s “recovery” is a paper improvement, not a real one.

The company’s improved position was purchased with an infusion of $50 billion in taxpayer dollars.

Even now, as Henderson and other GM officials talk of repaying some of the federal money they took, the Times notes the inconvenient truth that: “The money it is returning to the government is simply part of the loan that the company does not need.”

In other words, GM is using borrowed money to pay back borrowed money.

That’s not exactly a triumph of capitalism.

Worse yet, GM’s “signs of recovery” have been purchased at immense cost to working Americans.

The company has used its massive federal bailout to begin a process of shuttering more than a dozen factories, to lay off tens of thousands of auto workers, to eliminate more than one thousand car dealerships and to eliminate tens of thousands of jobs at those facilities across the country.

Even as the bailout was being arranged, GM was busy shuttering plants in communities such as Janesville, Wisconsin, leaving thousands of workers for the company and its suppliers jobless. Since the bailout, the rate of factory and warehouse closings has actually accelerated as the company has used federal dollars to pay to padlock facilities in the U.S. and to open plants in Mexico and China.

The raw numbers are staggering. In June, GM announced that 14 plants and three warehouses would be closed, at a cost of up to 20,000 jobs in communities across states such as Michigan and Ohio, as well as a number of other states.

Around the same time, the company announced that it was pulling the plug on 1,100 dealerships, at the expense of 100,000 additional jobs.

That was not a “recovery” plan. It was an exit strategy.

And, as promised, GM has not recovered. It has exited, leaving traditional manufacturing towns across the upper Midwest devastated.

What’s infuriating is that this process is being facilitated with U.S. tax dollars.

Under this “bailout” plan, GM is remaking itself as a corporate entity that employs fewer Americans, produces fewer cars in the U.S. and sustains fewer communities – effectively undermining the core arguments that were made in the first place for providing bailout funds to the company.

Instead of building itself back up as a great American manufacturer – with new approaches and better ideas for reconfiguring U.S. plants and retraining U.S. workers – GM has used the federal money to offshore its manufacturing operations and downsize its U.S. distribution network by pulling out of inner cities and small towns.

In other words, the taxpayers of the United States have paid for plant closings, layoffs, dislocation and downsizing of what was once a major employer. In return, they may get some of their money back.

That is not cause for celebration.

The auto bailout has been horribly mismanaged from the start.

The fundamental problem was that it was organized with an eye toward preserving the names of two companies – General Motors and Chrysler – but not the reality of those companies.

General Motors and Chrysler are not being “saved” as anything more than investment vehicles for the Wall Street speculators who have in the past year been so favored by powerful Republicans and Democrats in Washington.

What needed to be saved – the family-supporting jobs, the plants that were bedrock employers for communities across the country, a dealership network with many minority owners and all the jobs linked to it – have instead been severely undermined.

It will be suggested that, had the federal government not allocated bailout funds to GM and Chrysler, the two companies would have collapsed altogether – causing more job losses and plant closing.

That may be true. But the government did intervene, and we still ended up with massive job losses, too many plant closings and the loss of dealerships that did not need to close.

That’s what’s wrong with the bailout.

Instead of getting bang for its bucks, the federal government has giving bucks to corporations that are banging around American workers and the communities.