In a large bowl, combine flour, sugar, butter, molasses, egg, cinnamon, baking powder, ginger, cloves, baking soda, salt, and nutmeg. With a mixer at medium speed, beat until well-mixed. Wrap in plastic wrap and refrigerate 1 hour. Preheat oven to 350°F.
On a lightly floured surface with a lightly floured rolling pin, roll dough 1/8-inch thick. Use cookie cutters to create desired ornament shapes, and place on ungreased cookie sheets about 1/2 inch apart. Using a skewer or the tip of a knife, make a hole in the top of each cookie. Re-roll trimmings and cut. Bake 8 minutes, or until lightly browned around the edges. With a spatula, transfer to wire racks to cool completely.
Combine confectioners' sugar with just enough milk to make a smooth icing. Spoon into a pastry bag fitted with a writing tip, or use a plastic bag and snip the tip from one corner to make a small hole. Pipe designs on cooled cookies and decorate as desired. Set aside to dry completely.