What do you think is an appropriate form of discipline for children 5 and under?

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Many of us have all been in the same situation with a screaming child in the store or mall and not knowing exactly how to handle the situation in public. With state and country laws prohibiting spanking, Super Nanny promoting time outs, and Dr. Phil saying that "Yelling is the New Spanking", its a wonder we parents have no clue what to do. I have a two year old daughter and she is definitely testing her boundaries. We incorporate several methods of discipline. Basically, I feel it depends on the situation at hand. She gets one verbal warning and then she is removed from the situation. If she repeats the offense, then she gets a short time-out. Lastly, if the bad behavior continues, then she gets a few good swats on the bottom. Most of the time it never escalates to a spanking. I don't believe in yelling, counting to 3 or multiple chances. I think bad behavior needs to be corrected immediately to avoid future confusion. What do you think? And what are your methods of discipline? Please no hateful comments, you may not agree with any form of discipline someone else uses but that does not give you the right to judge or be hateful.