Unsatisfied Quest: Justice and Mercy

In Exodus 34:6-7, God declares God's character to Moses:

"And the Lord passed by before him, and proclaimed, The Lord, The Lord God, merciful and gracious, longsuffering, and abundant in goodness and truth,Keeping mercy for thousands, forgiving iniquity and transgression and sin, and that will by no means clear the guilty; visiting the iniquity of the fathers upon the children, and upon the children's children, unto the third and to the fourth generation." (KJV)

I one time heard a Presbyterian minister say in a sermon that this passage used to puzzle him.  The passage says that God is merciful and forgiving, but also that God punishes sin.  The minister wondered how God could be both forgiving and punish sin.  His conclusion was that God's mercy and justice were reconciled on the cross, where Jesus was punished for the sins of others, thereby bringing forgiveness to those who receive it.

I've heard this sort of spiel often in evangelical circles.  The thing is, it does not appear to be present in Exodus 34:6-7.  Exodus 34:6-7 does not say that God is forgiving and punishes sin, and so therefore God will forgive people by punishing a single individual in their place.  Rather, the passage says that God is forgiving and God punishes sin, and so therefore God will hold the guilty accountable and punish their children and children's children.

But the minister still raises a good question: How can God be forgiving and yet punish sin?  I can't say that I have an answer that fully satisfies me.  I can say that God forgives those who repent and perhaps make use of other means of atonement, while God punishes those who do not repent, but the text does not explicitly say that.  I can say that God forgives some people but not others----for example, there were people who worshiped the Golden Calf who died in God's wrath, and there were people who worshiped the Calf who survived.  But I'd have a theological problem with God being so arbitrary.  Plus, in sparing some, is not God clearing the guilty, something that God said that God would not do?  Another option is to say that God's forgiveness and justice are mixed somehow: that God forgave Israel by letting her survive as a nation rather than blotting her out for her sin, for example, and yet God disciplined Israel.  But that doesn't sound like full-fledged mercy and forgiveness!

And so I don't know.  But I will say one thing: While there are many people who believe that typical evangelical spiels provide the answer to their quests and their confusion, I do not think that in my own case, which is why I continue to be on a quest.