I would like to talk specifically to Catholics for a minute. We have overemphasized the role works play in our salvation. Works don't save us. It's not the teaching of the Church, but it is certainly our understanding, and definitely something that a lot of us have been taught. Maybe some have been taught that explicitly, but others may have picked it up implicitly. I see a much greater emphasis and understanding today on the fact that it is grace that saves us, but I also still see the wounds of people that have been trying so hard to earn their way into heaven.
Maybe you could pray to the Holy Spirit for understanding and healing, and then read these verses in Romans. These words are life for us all.
In 3:21, remember that Paul is talking to Christians that are both Jew and Gentile. When he is talking about the works of the law, he is primarily referring to the 600 some proscriptions of the Jewish law. Keep in mind that the Jews' history was one of being called by God and answering His call, only to fall away and turn back to sin. When this happened, God allowed them time to repent, and if they didn't, He usually allowed them to be exiled or oppressed by a foreign political power. They may have seen this as punishment, but God used this as mercy. It was mercy, because in their need, they generally turned back to Him. If He had allowed them not to feel their need, they would have continued in their sin.
At the time of Jesus, the people were no longer in exile, but they were under the Roman law. They did not accept this graciously, and they looked for the Messiah to return them to their full religious/political status as God's people. One of the ways that they did this was to be sure that they were following the law. Did they ever follow it! Down to the last letter. This is part of the attitude of the Pharisees that led them to be such colossal pricks at times.
Paul is announcing the new era brought by Jesus. All people are to partake in the salvation that was ushered in by the Jews. God had been giving hints of this from the very beginning when He told Abraham: "You shall be the father of a multitude of nations" (Gen 17:4). In the time of the New Covenant, there is no longer a distinction between Jew and Gentile. We can't grasp what this meant. At that time, a Gentile could never enter fully into Judaism. He could be a God-fearer and follow the law, but he would never be fully a Jew. Paul is telling us that this distinction is wiped away by Christ. We have equally sinned, and we equally have been offered grace through Christ.
The Jews poured over the Scripture in their quest for God and waiting for the Messiah. I think part of the problem was that they allowed their quest for God to become about them. They wanted God to get the glory as long as it led to their glory as well. They were not seeking God for His own sake.
You can't tell me you haven't done this. Okay, maybe you haven't, but I certainly have. I may be following God, when suddenly something He shows me becomes about me. Suddenly something that I had been doing for Him, I started doing for me. It becomes about some other purpose than Him and Him alone.
Moving on. I have to talk about works for a brief moment. Sorry. It's a compulsion. Abraham was righteous before he was circumcised, because of his faith. But what if he hadn't been circumcised? He would be disobedient to God's command, and it would not be consistent with the faith that he had just professed. Also, when we think of Abraham's faith, we think of his actions in preparing to sacrifice his only son at God's command. We are impressed by his faith because of his actions (works).
Okay, so here's what I take from this. Our walk with God should be one that is based on faith. We should actively live that faith through our works, but we should be at peace, knowing that we will fail, we will sin, and that God will save us because He loves us no matter what. Our peace should not be a complacent one... we don't want to be the servant that buried the talent that we were given, but it should be one where we know that God's abundance will supply for our lack.