It may work in short term but then you run out of population in long term. And suddenly any gains from short term improvement is under a big question mark.
Of course you can also over build this capital that will never be used, but will need to be paid back (for example a local government pays to build a town that there are no people to fill it with) and the maintenance is too much, but you still have to look after the people who did the building.
That's is in no way sustainable on an individual level and worse on a societal level when you have a small working population and a large number of people that require care.