He who spares his rod hates his son, but he who loves him disciplines him promptly.
Why is "sparing the rod" considered hateful; seems somewhat extreme.
A child will usually know when he does something wrong.  If the parents don't
correct him, then the child will think the parents don't care what
he does.  Consequently the child will feel the parents just don't care at all.
Children need boundaries which they get from rules and discipline.  Without
them the child may grow up anxious or insecure.
What is the character of discipline?  (as used here)
A disciplined person has the strength to overcome the flesh and produce good.
An undisciplined person is obligated to do whatever his master (the flesh)
requires him to do.
Not disciplining a child will cripple him for the rest of his life.  (which
is a hateful thing)
What is punishment?
Punishment is a tool used to cause a child to think before he acts.  (in other
words, to be disciplined or considerate)
The reason we punish a child (with the desire to discipline/love him) is
to make sure the child will have enough strength to survive in a tough world.  (which
capitalizes on people's weaknesses and lack of discipline;  i.e. drugs, porn, etc.)
The problem occurs when parents administer punishment with no thought of
giving the child any sort of maturity or discipline.
For instance, punishing a child because you are "ticked off" by their actions, and
punishment is a way to "get back at them for what they did to you."
Punishing a child without love / instruction / direction is how a self-indulgent,
undisciplined parent deals with their anger in the flesh.
How does God discipline us and to what purpose?
God disciplines us through trials and tribulations.
1Pet 1:6-9  "... that you may rejoice with joy inexpressible ... full of glory ..."
Ps 66:10-12  "... but you have brought us out to rich fulfillment."
Rom 8:18-39  "... all things work together for good to those who love God, ... "
Many people will say, "God is punishing me and I don't know why."  Is God like
that?  NO!  Never assume God is angrily punishing you for some unknown sinful
act.  God is quite capable of revealing your rebellion to you, in which you will
understand His discipline.
Heb 12:5-11  "... for what son is there whom a father does not chasten? ..."
Trials that fly out of left field are often spiritual attack or warfare. 
However, whether we understand or not,
we should always have an attitude of joy when facing trials; trusting our
Father.  For this will produce patience and glorify God.
James 1:2-4  "... count it all joy when when you fall into various trials ...
the testing of your faith produces patience ..."
1Pet 4:12-16  "... if anyone suffers as a Christian, ... let him glorify God ... "
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