Does God punish people?

He doesn’t. This is a massive misconception. God is not a vengeful overseer seeking retribution or repayment. In Orthodoxy, He is referred to as 'The Bridegroom' and we, His creation, are His 'Bride'. Thus, God is really a heart-broken lover whose only desire is to save His beloved creation from themselves, demanding nothing in return from them. The legalistic view of God, as being some sort of punisher, who sends his son to suffer as “payment” for our sin is actually a Roman Catholic idea. The Catholic Church interpreted the Bible in a more literalistic, legalistic sense, which we Orthodox believe is an error, and has led many astray. Ancient, Orthodox Christianity does not view God in this way at all. We understand that Christ didn’t come and die on the cross to somehow appease God the Father, as if he needed payment. This is totally not it. Jesus is the groom. We are his bride. He did not come to sacrifice himself to the Father, but to sacrifice himself to us. The entire gesture of being born human, subject to human pain, toil and hardship, then suffering and being crucified, was an ultimate sacrifice of the self, a total expression of humility and love. An example. A perfect example of perfect love. God the Father, Jesus the Son, and the Holy Spirit in perfect union saying, “this is how much I love you”. And His love was so perfect that its byproduct was life, and death could not contain Him, and He not only raised Himself, but he resurrected everyone and everything with Him.

When you read the Bible without context, especially the Old Testament, it can sure seem that God is a vengeful punisher, smiting people here and there, even his own son!  People reject that. They see a contradiction: if God is meant to be loving, then how could he do that? And they are right to reject it. Because their gut feeling is correct. The Orthodox Church puts everything in perspective. The saints, guided by the Holy Spirit, tell us how to interpret the scriptures. You have to understand who these texts were written by, what type of texts they are and their historical contexts. When churches split from Orthodoxy and started interpreting on their own steam, without the guidance of holy tradition, interpretations became erroneous.