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In a large bowl, beat sugar, 1 cup margarine, 2 tsp vanilla, 2 tsp rum extract and egg until light& fluffy.
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Stir in flour& 1 tsp nutmeg; mix well.
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Cover dough with plastic wrap- chill at least 30-45 minutes for easier handling.
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Preheat oven to 350F degrees.
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Divide dough into 6 pieces.
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On lightly floured surface, shape each piece of dough into a long rope, 1/2-inch in diameter.
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Cut into 3-inch lengths; place on ungreased cookie sheets.
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Bake 12-15 minutes or until light golden brown.
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Immediately remove from cookie sheets,& cool completely.
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To make frosting: in a small bowl, combine all frosting ingredients (except nutmeg), adding enough milk for desired spreading consistency; blend until smooth.
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Spread frosting on cookies, and mark with tines of a fork to resemble bark.
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Sprinkle each cookie lightly with nutmeg,& allow frosting to set.
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Store cookies in a tightly covered container.
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**NOTE:These cookies freeze well.