Preheat oven to 425 degrees. Set out a large baking sheet. Into a large bowl, sift flour with nutmeg. Using a pastry blender, cut butter into flour mixture until mixture has the texture of cornmeal. Add sugar and blend with flour mixture. Combine vanilla and eggs and stir into dry ingredients, blending to form a ball of dough. Turn out on lightly floured surface and roll 1/8 inch thick. Sprinkle with powdered sugar, then cut with a doughnut cutter. Lay cookies on baking sheet. Bake until light tan around the edges, 10 to 12 minutes. Watch baking time carefully as these cookies are topped with sugar and burn easily in the hot oven. As each batch is done, remove from oven. Transfer immediately to brown paper or wire racks to cool. When thoroughly cooled, store in an airtight container.
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