Add the ground beef and water to a large heavy-bottomed pot over medium heat. Break the beef apart with a wooden spoon as it heats, cooking it through without browning it — about 8–10 minutes, until no pink remains.
Stir in the mustard, tomato paste, chili powder, cumin, cayenne, onion powder, garlic powder, salt, pepper, and sugar. Stir well to combine.
Reduce heat to low. Mash the mixture with a potato masher on and off for about 10 minutes, breaking the beef down into fine fragments.
Simmer uncovered on low for 45–55 minutes, stirring every 8–10 minutes to prevent scorching, until the sauce has reduced and thickened.
Check consistency: the chili should coat the back of a spoon and hold a trail briefly when a spoon is dragged through the center. If it's still thin, continue simmering in 10-minute increments.
Serve hot over hot dogs, burgers, or fries. If making ahead, cool for 30 minutes at room temperature before refrigerating.