Do we spend too little?

Short answer: Hell no.

A longer answer is offered by Charlotte Allen at the Mises Institute: Keep Your Self-Righteous Fingers Off My Processed Food

The latest cheerleader for higher prices is Ellen Ruppel Shell, a professor of science journalism at Boston University who has just published a book titled Cheap. It's not a guide to bargain-hunting. The theme of Shell's book, subtitled The High Cost of Discount Culture, is "America's dangerous liaison with Cheap."

Shell's argument goes like this: shopping at discount stores, factory outlets, and, of course, Wal-Mart (no work of social criticism is complete without a drive-by shooting aimed at that chain) exploits Chinese factory workers (who would much rather be back on the collective farm, wearing their Mao suits) and degrades the environment because much of the low-price junk wears out and ends up in landfills.
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In an online debate with the Atlantic's economics writer, Megan McArdle, Shell observes with disapproval that, when prices are adjusted for inflation, Americans today spend "40% less on clothes, 20% less on food, more than 50% less on appliances, about 25% less on owning and maintaining a car" than they did during the early 1970s. Over that same period, Census Bureau tables show, US median household income rose by at least 18% in constant dollars — despite the much-lamented (by Shell and others) decampment of "once-flourishing" manufacturing jobs to China and elsewhere. That's why even America's poorest people nowadays can afford automobiles, cell phones, and TVs.

Yet a significant number of social critics wish they couldn't. Robert Pollin, an economics professor at the University of Massachusetts-Amherst — cited approvingly by Shell — has argued for higher clothing prices and steep taxes on fossil fuels in the name of various social and green causes, even though, as he conceded in a January article in the Nation, the latter measure would "impose higher energy prices on businesses and individuals."

The most zealous of the spend-more crowd, however, are the food intellectuals who salivated, as it were, at a steep rise in the cost of groceries earlier this year, including such basics as milk and eggs. Some people might worry about the effect on recession-hit families of a 17% increase in the price of milk. Not Alice Waters, the food-activist owner of Berkeley's Chez Panisse restaurant, who shudders at the thought of sampling so much as a strawberry that hasn't been nourished by organic compost and picked that morning at a nearby farm — and she thinks everyone else in America should shudder too. "Make a sacrifice on the cell phone or the third pair of Nike shoes," Waters airily informed the New York Times in April.
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Those who think that there is something wrong with owning more than two pairs of sneakers or that exquisite fastidiousness about what you put into your mouth equals virtue need to be teleported back to, say, the Depression itself. Then, privation was in earnest and few people had telephones, much less cell phones.

Read some 1930s memoirs: Back then, people who couldn't afford "quality" furniture slept on mattresses on the floor and hammered together makeshift tables out of orange crates. They went barefoot during the summer and sewed their children's clothes out of (nonorganic) flour sacks. That was what "cheap" meant then — not today's plethora of affordable goods, which the social critics would like to take away from us.

People who want to support organic local farmers and craftsmen producing one-off hand-crafted chairs are welcome to do so. People who can't afford the higher prices are better off because they can buy servicable equivalents for something they can afford.