Children are generally not proud, but humble. Because God promises to resist and humble the proud, and because He promises to exalt and give grace to the humble (Luke 18:14; 1 Pet. 5:5), children serve as excellent examples of the kind of people who are going to heaven---and who are considered great in God's eyes. There are no proud people on the way to heaven, because those who are truly saved have humbled themselves, acknowledged their sins, repented, and now live in submission to God, conscious of His grace.
Incidentally, it is from scriptures such as these that we derive the conviction that all children who die go to heaven. If children serve as God's example of heaven-bound people, then it stands to reason that all of them are heaven-bound. They must all eventually reach an age, however, when they too must "be converted and become like children" (18:3) if they are to enter heaven. Obviously that would be when they are no longer children, but adults, the time that theologians refer to as "the age of accountability."
According to Jesus, children can indeed believe in Him (18:6) and because God wants none of them to perish (18:14), anyone who causes a believing child to stumble, that is, to doubt or disbelieve in Him, faces dire consequences. Being tied to a millstone and tossed into the ocean is a precursor of what lies beyond death for such a person. Imagine quickly descending past the cold depth of 3,280 feet---where surface light no longer penetrates---and where the pressure of the water is 1,474 pounds per square inch. Not a pleasant experience.
True believers would never cause a believing child to stumble. But unbelievers and hypocrites are guilty of it all the time, as they set sinful examples before children and sow Satan's lies in little minds. How tragic it is when, through their words or deeds, parents cause their own children to stumble into sin. What an awesome responsibility it is to raise children whose "angels in heaven continually behold the face of God" (18:10).
Perhaps the first two steps of church discipline that Jesus outlined in 18:15-17 can be followed in modern institutional churches, but everyone knows that the final step---when the entire church gets involved---is impossible. Jesus envisioned churches like those we find in the book of Acts---small groups that regularly met in houses. Only in those small settings is the third step possible, where everyone knows and loves both the offender and the offended. Notice that Jesus' words about being in the midst of a gathering of just two or three persons (18:20) are found just three verses after His words about the church (18:17).
Some groups have certainly gone overboard attempting to follow Jesus' instructions to treat unrepentant members as "Gentiles and tax-gathers," forgetting that Jesus reached out to such folks with love and the gospel. Certainly those who shun members who refuse to submit to their man-made rules and traditions are greatly missing the mark, especially when their members continue to serve the Lord in other churches.
It is unlikely that Peter, after just hearing Jesus' instruction about confronting offending brothers and excommunicating those who don't repent, was wondering how many times he should forgive an unrepentant brother. Certainly mercy can be offered to anyone, but forgiveness can only be given to those who ask for it, because forgiveness is the erasing of a debt that results in restoration of the broken relationship. God offers mercy to all, but only forgives those who repent. He does not expect of us what He does not practice Himself.
In the parable of the unforgiving servant, notice that the first servant asked for forgiveness and received it. The second servant then asked the first servant for forgiveness and was refused. That angered his master and resulted in the reinstatement of the first servant's formerly-forgiven debt and consequent punishment. Jesus promised the same for those of us who refuse to forgive a brother in Christ. I wish I could write more about this, and I have on our website here. If you have questions, take a look!
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