Nothing sums up the identity of a Christian better than the phrase: "Simul Iustus et Peccator." The Christian is, at the same time, wholly (totus) a sinner, who deserves God’s temporal and eternal punishment, and wholly (totus) righteous* before God on account of Jesus' Good Friday. And, as St. Paul writes,
“What I am doing, I do not understand; for I am not practicing what I would like to do, but I am doing the very thing I hate. But if I do the very thing I do not want to do, I agree with the Law, confessing that the Law is good. So now, no longer am I the one doing it, but sin which dwells in me. For I know that nothing good dwells in me, that is, in my flesh; for the willing is present in me, but the doing of the good is not. For the good that I want, I do not do, but I practice the very evil that I do not want. But if I am doing the very thing I do not want, I am no longer the one doing it, but sin which dwells in me” (Rom 7:15-20).
Yet, at the same time, “...there is now no condemnation for those who are in Christ Jesus. For the law of the Spirit of life in Christ Jesus has set you free from the law of sin and of death” (Rom 8:1-2).
St. Paul doesn't say “I was” in the past tense, but “I practice the very evil that I do not want,” in the present. I'm an active sinner in fact, not in theory. The apostle confesses that in his flesh he's a slave to the law of sin and death, yet at the same time, in the present tense, through the Spirit he's a slave to Christ Jesus.
St. Paul isn’t alone in this either. David writes, “And do not enter into judgment with Your servant, for in Your sight no man living is righteous” (Ps 143:2). Then, he concludes, “Let Your good Spirit lead me on level ground. For the sake of Your name, O Lord, revive me. In Your righteousness bring my soul out of trouble” (Ps 143:10b-11).
Finally to Timothy, St. Paul writes, “It is a trustworthy statement, deserving full acceptance, that Christ Jesus came into the world to save sinners, among whom I am foremost of all” (1 Tim 1:15). However, in spite of this, “...for this reason I found mercy, so that in me as the foremost, Jesus Christ might demonstrate His perfect patience as an example for those who would believe in Him for eternal life” (1 Tim 1:16).
Later, Martin Luther repeated St. Paul’s teaching. Luther put it this way: “The saints in being righteous are at the same time sinners; they are righteous because they believe in Christ whose righteousness covers them and is imputed to them, but they are sinners because they do not fulfill the law and are not without sinful desires. They are like sick people in the care of a physician: they are really sick, but healthy only in the hope and insofar as they begin to be better, healed, i.e., they will become healthy. Nothing can harm them so much as the presumption that they are in fact healthy, for it will cause a bad relapse.”(Luther, Romans Commentary).
Without this “simul” distinction, theology lapses into moralism. Salvation is reduced to a process of self-improvement in which God and man each contribute their fair share and man’s progress is measured against a scale of increasing holiness.
For Luther that's totally unacceptable. It's incompatible with Scripture. If we have to do our part and meet God half way, or even part of the way, we end up with terrified consciences because the old man in Adam, not the new man in Christ, is running the show.
Without the “simul” distinction, theology lapses into moralism. Salvation is reduced to a process of self-improvement.
In the same way, pastors who don’t treat the people under their care, as Luther wrote, “... according to the Divine reckoning,” that, “we are in fact and totally righteous, even though sin is present. So we are in fact at the same time and altogether sinners” (Third Antinomian Disputation, 1538), end up terrifying consciences and drive sinners from the sweet consolation of God’s promises in Christ.
It is these promises, the good news about God’s justification of the ungodly in Christ, that are at the root of the Gospel. As Luther wrote, “Whatever sins I, you, and all of us have committed or may commit in the future, they are as much Christ’s own as if He Himself had committed them” (Galatians Lectures, 1535).
But, if no man can hope to please God and be saved from sin, death, and the devil, who can be saved? Jesus Himself answers that question for us: “With people this is impossible, but with God all things are possible” (Matt 19:26).
*In short, our righteousness is called (in plain language) the forgiveness of our sins. Or, as it says here: “sins not counted,” “sins covered,” “sins not to be seen.” Here stand the clear plain words: All the saints are sinners and remain sinners. But they are holy because God in His grace neither sees nor counts these sins, but forgets, forgives, and covers them. There is thus no distinction between the saints and the non-saints. They are sinners alike and all sin daily, only that the sins of the holy are not counted but covered; and the sins of the unholy are not covered but counted. One would have a healing dressing on and is bandaged; the other wound is open and undressed. Nevertheless, both of them are truly wounded, truly sinners, concerning which we in our books in other places have abundantly bore witness. - Martin Luther, Introduction to Psalm 32.