It is shown that for plasma parameters characteristic of those found in magnetoplasmadynamic (MPD) thrusters the modified two-stream instability may exist in the plasma. The critical parameter for triggering this instability is the ratio of the crossfield current to the ion saturation current. Once triggered, this instability greatly increases the plasma resistivity to the flow of the current and heats both ions and electrons. The anomalous momentum-exchange frequency and heating rates are calculated for characteristic MPD thruster parameters.