That no one is or can be godly under the Law terrifies consciences, but the consolation of the Gospel is the promise of Christ...

The New Testament keeps and urges this office of the Law, as St. Paul does when he says, "The wrath of God is revealed from heaven against all ungodliness and unrighteousness of men" (Romans 1:18). Also, "the whole world may be accountable to God ... No human being will be justified in His sight" (Romans 3:19-20).  And, Christ says, the Holy Spirit will convict the world of sin.

This is God's thunderbolt.  By the Law He strikes down both obvious sinners and false saints.  He declares no one to be in the right, but drives them all together to terror and despair.  This is the hammer.  As Jeremiah says,  "Is not My word like ... a hammer that breaks the rock in pieces?" (23:29).  This is not active contrition or manufactured repentance.  It is passive contrition, true sorrow of heart, suffering, and the sensation of death.

This is what true repentance means.  Here a person needs to hear something like this, "You are all of no account, whether you are obvious sinners or saints (in your own opinions).  You have to become different from what you are now.  You have to act differently than you are now acting, whether you are as great, wise, powerful, and holy as you can be.  Here no one is godly."

But to this office of the Law, the New Testament immediately adds the consoling promise of grace through the Gospel.  This must be believed.  As Christ declares, "Repent and believe in the gospel" (Mark 1:15).  That is become different, act differently, and believe My promise.  John the Baptist (preceding Christ) is called a preacher of repentance, but this is for the forgiveness of sins.  That is, John was to accuse all and convict them of being sinners.  This is so they can know what they are before God and acknowledge that they are lost.  So they can be prepared for the Lord to receive grace and to expect and accept from Him the forgiveness of sins.  This is what Christ Himself says, "Repentance and forgiveness of sins should be proclaimed in [My] name to all nations" (Luke 24:47).
~BOC, SA, III, III, 1-6

To deny that faith justifies teaches nothing but the Law, setting aside both Christ and the Gospel...

... Just as it is necessary to keep this statement—Christ as Mediator—so it is necessary to defend that faith justifies.  For how will Christ be Mediator if we do not use Him as Mediator in justification, if we do not hold that we are counted righteous for His sake?  To believe is to trust in Christ's merits, that for His sake God certainly wishes to be reconciled with us.  Here is a similar point:  Just as we should defend that the promise of Christ is necessary apart from the Law, so also should we defend that faith justifies.  For the Law cannot be performed unless the Holy Spirit is received first.  It is, therefore, necessary to defend that the promise of Christ is necessary.  But this cannot be received except through faith.  Therefore those who deny that faith justifies teach nothing but the Law, both Christ and the Gospel being set aside.
~BOC, Apology, IV (II), 69-70

The Holy Spirit bestows, increases, and strengthens faith as He makes us holy as we abide in faith...

But the Holy Spirit carries on His work without ceasing to the Last Day.  For that purpose He has appointed a congregation upon earth by which He speaks and does everything.  For He has not yet brought together all His Christian Church or granted all forgiveness.  Therefore, we believe in Him who daily brings us into the fellowship of this Christian Church through the Word. Through the same Word and the forgiveness of sins He bestows, increases, and strengthens faith.  So when He has done it all, and we abide in this and die to the world and to all evil, He may finally make us perfectly and forever holy.  Even now we expect this in faith through the Word.
~BOC, LC, II, 61-62

Baptism, as with the entire Gospel, is an outward, verbal preaching...

Now these "new spirits" are so crazy that they separate faith and the object to which faith clings and is bound, even if it is something outward.  Yes, it shall and must be something outward, so that it may be grasped by our senses and understood, and by them be brought into the heart.  For indeed, the entire Gospel is an outward, verbal preaching.  In short, what God does and works in us He intends to work through such outward ordinances.  Therefore, wherever He speaks--indeed, no matter what direction or by whatever means He speaks--faith must look there.  It must hold to that object.  Now here we have the words "Whoever believes and is baptized will be saved" (Mark 16:16).  What else can these words refer to but Baptism, that is, to the water included in God's ordinance?  Therefore, it makes sense that whoever rejects Baptism rejects God's Word, faith, and Christ, who directs us to Baptism and binds us to Baptism.
~BOC, LC, IV, 30-31

Baptism gives faith the outward thing upon which it stands and rests...

Our would-be "wise spirits" assert that faith alone saves, and that works and outward things do nothing.  We answer, "It is true, indeed, that nothing in us is of any use but faith, as we shall hear still further."  But these blind guides are unwilling to see this:  faith must have something that it believes, that is, of which it takes hold and upon which it stands and rests.  So faith clings to the water and believes in Baptism, there is pure salvation and life.  This is not through the water (as we have stated well enough), but through the fact that it is embodied in God's Word and institution, and that God's name abides in it.  Now, if I believe this, what else is it than believing in God as the One who has given and planted His Word into this ordinance and offers to us this outward thing by which we may gain such a treasure?
~BOC, LC, IV, 28-29

Christ connects the promise of the forgiveness of sins to good works...

Christ often connects the promise of the forgiveness of sins to good works, yet not because He means that good works are an atoning sacrifice (for they follow reconciliation).  Christ makes this connection for two reasons.  One is because good fruit must necessarily follow.  He reminds us that if good fruit does not follow, the repentance is hypocritical and fake.  The other reason is that we have need of outward signs of so great a promise.  A conscience full of fear has need of much consolation. Baptism and the Lord's Supper are signs that continually remind, cheer, and encourage despairing minds to believe more firmly that their sins are forgiven.  So the same promise is written and portrayed in good works, in order that these works may remind us to believe more firmly. Those who produce no good works do not encourage themselves to believe, but despise these promises. On the other hand, the godly embrace them and rejoice that they have the signs and testimonies of so great a promise.  So they exercise themselves in these signs and testimonies.  Therefore, just as the Lord's Supper does not justify us by the outward act (ex opere operato) without faith, so alms do not justify us by the outward acts (ex opere operato) without faith.
~BOC, AP, V (III), 155-156