Many programs run in 1999, which have, results that carry over to 2000 produce errors. Some also don't work right when run for the first time in 2000. The delays, errors and decreased productivity cascade through the economy. Lawsuits clog the courts, further dragging the economy down. Financial markets react.
Stocks go into a substantial bear market and interest rates rise.
The year 2000 problem results in a depression. The problems threaten physical harm to the public as well as collapse of the economy. Before events can escalate the government intervenes. A bank holiday is declared. Government mobilized troops or bureaucrats take over food shipments and other essential activities.