“For God has done what the law, weakened by the flesh, could not do. By sending his own Son in the likeness of sinful flesh and for sin, he condemned sin in the flesh, in order that the righteous requirement of the law might be fulfilled in us, who walk not according to the flesh but according to the Spirit.” -Romans 8:3–4
Since the law could not impute righteousness, not because it was anything other than good, holy, and just, but because of the disease of sin in the flesh of man, the law was made impotent to this purpose.
As Paul has shown, this does not mean the law no longer serves any function or that it is impotent to reveal the holy standard of righteousness. It simply means that man, due to the impotency of his flesh, cannot attain righteousness by keeping the law.
So God has done for believers what the law could not do. He sent his Son (i.e., the second person of the Godhead, the Word, the Divine Logos) to take on the likeness of sinful flesh and become a sin offering, literally, to become a propitiation (i.e., and for sin Cf. Leviticus 16:5-22, Hebrews 13:11-12, and 1 John 2:2).
By sending Christ to be a sin offering, God condemned sin in the flesh; that is, he gave believers a righteous standing before God so that they could fulfill the righteous requirement of the law. But it is conditional. It must be received by faith Cf. Romans 4:22-25.
What then is the evidence for this faith? It is seen in that the believer walks not according to the flesh (his old sinful habits) but according to the Spirit. On this particular phrase, John Calvin notes, “But it was very proper for him, after having promised gratuitous remission to the faithful, to confine this doctrine to those who join penitence to faith, and turn not the mercy of God so as to promote the licentiousness of the flesh.”
In other words, true regeneration is seen in the person who not only confesses Christ, and not in order to presume on God’s grace (i.e., once saved always saved), but also walks in daily, humble repentance (i.e., perseverance of the saints).
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