Yes, we've seen that already without necessarily a technological singularity. You accurately describe the great depression in the 1920s and several similar events prior to that.

But what's consistent with those events is that they end and economic development is resumed under different circumstances. I don't see any reason that the current era will be different or that current problem will be unfixable. People used to get paid to build national parks. What would be our current iteration of national parks?