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Although we wish that today's reading were clearer and that Paul's reasoning made better sense, his general points are not beyond the grasp of our understanding.
Clearly, Paul continues to expose the error of Jews who believed that being right before God was something that was merited by circumcision and keeping the Law of Moses. Of course, had any Jew perfectly kept the Mosaic Law from birth until death, he would have been right before God, needing no grace or forgiveness. But like so many church-goers today, most Jews' obedience to God's commandments was very nominal, yet they assumed that they were OK.
Most Jews in Paul's day were also quite proud of their heritage and God's dealings with their ancestors, which further bolstered their assurance of God's approval. So Paul was very wise to use Abraham as an example of someone who was made right before God, not as a result of being circumcised and keeping God's laws (as we know from the biblical account that Abraham was not a perfect man), but by faith. Scripture says, "Abraham believed God, and it was credited to him as righteousness" (4:3; Gen. 15:6). That verse was written for the benefit of all who would read it, that they might understand how sinners can become right before God (4:23).
Genesis 15:5 tells us that God told Abraham to look up at the stars in the night sky and then promised him that his descendants would be as numerous. The very next verse says that Abraham "believed in the Lord, and [God] reckoned it to him as righteousness" (Gen. 15:6). Note that Abraham "believed in the Lord." That is, he didn't just believe a promise from the Lord, but believed in the Lord Himself. So we could say that Abraham was justified by faith in Jesus, even though he didn't know the Lord by that name! So, too, we must believe, not just some historical or theological facts about Jesus, but we must believe in Him (John 3:16). And since He is the Lord, if we believe in Him, we will begin to obey Him. Our faith will be evident by our actions, just as Abraham's faith was evident by his actions.
Paul also points out that Scripture says the esteemed Abraham was made righteous before he was circumcised (4:10-11). That should have helped circumcised Jews understand that circumcision was obviously not the ticket to being right before God. It should have also helped them believe that Gentiles could be saved without being circumcised, just like Abraham was. Paul, in fact, sees God's promise to Abraham that he would become the "father of many nations" as a foretelling of him becoming a "father" as it were, of Gentiles who, like him, would be made right before God by faith, and without being circumcised.
Note that Abraham was made right before God hundreds of years before the Law of Moses was given. So we learn that, before the Mosaic Law, sinners could become right before God by faith. Paul also points out that highly-esteemed David, who lived under the Mosaic Law and who obviously did not keep it perfectly, was also made righteous by faith, experiencing the great blessing of having his sins forgiven (4:6-8). So we learn that being made right with God has always been through faith, before the old covenant, during the old covenant, and of course under the new covenant as well.
No one can intelligently argue against the plain fact that if sinners are going to be right before God, it will require God's grace. God has chosen, however, to give His grace only to those who have faith in Him, which requires humility and results in repentance. But being saved by grace through faith in no way mitigates the necessity of holiness. Rather, genuine faith results in holiness.
Jesus "was delivered over because of our transgressions, and was raised because of our justification" (4:25). There's the good news! Our salvation was made possible because Jesus suffered to pay our penalty, and after He had paid it in full by His death, He came back to life!