For spice bag, place bay leaves and allspice on a square of double thickness 100-percent-cotton cheesecloth. Bring up corners and tie with clean kitchen string; set aside.
In a Dutch oven, cook beef, onion, and garlic until the meat is no longer pink; drain well. Stir in chili powder, cinnamon, and ground red pepper. Cook and stir for 1 minute. Stir in water, beans, tomato sauce, vinegar, Worcestershire sauce, salt, and 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 of desired consistency. Remove spice bag; discard. Serve chili over spaghetti, if desired. Makes 8 servings.