For spice bag, place bay leaves and allspice in center of a double-thick 6-inch square of 100 percent-cotton cheesecloth. Bring up corners and tie with 100 percent-cotton kitchen string; set aside.
In a Dutch oven, cook ground beef, onions, and garlic until meat is brown. Drain off fat. Stir chili powder, cinnamon, and cayenne pepper into beef mixture in Dutch oven. Cook and stir for 1 minute. Stir in the water, beans, tomato sauce, vinegar, Worcestershire sauce, salt, and black pepper. Add spice bag. Bring to boiling; reduce heat. Cover and simmer for 30 minutes. Uncover; simmer for 15 to 20 minutes more or until desired consistency. Remove spice bag; discard. If desired, serve chili over spaghetti. If desired, top with sliced green onion and cheddar cheese.