I think the goal here is to put people to work as in the Great Depression.
This accomplishes quite a few very good things.
One, it takes people off unemployment, welfare etc.
Two, the jobs projects are all truly needed and will have to be done anyway.
Three, These people put back to work are then paying taxes back into the system and they a buying many products with their new paychecks.
And four, it gives the country a serious psychological boost... consumer confidence is very important.
You are correct in that in the long run the overall business dynamic must improve because "Works Programs" can't just go on forever.
But this may well give us the breathing room we need to actually do that.