Jobs would only be reallocated if someone were actually going to pay them. Currently, nobody wants to pay for new employees (check the current unemployment trends). Therefore government intervention is the only way to take the otherwise idle hands and put them to work.

Paul Krugman wrote on this topic a bit ago:
http://krugman.blogs.nytimes.com/2008/12/22/bad-anti-stimulus-arguments/

And to continue the finance geek thing...

When a stock is added to an "index", it will open itself to others who "buy the index", thereby increasing the price of that stock without any actual interest in that specific stock. Therefore, the stock can actually increase without investors even caring about the particular stock.