The repeated opening word of the first two verses of this psalm carries the reader back to the first word of the Psalter and forward to the Matthean Beatitudes. One who believes that one’s sins are not held against one is truly blessed by God’s grace. This thought is the heart of Luther’s doctrine of justification by grace through faith. However, it is also quite close to Luther’s doctrine of imputed righteousness, which might be better called a doctrine of imputed sinlessness when one considers the phrase, “blessed is the person whose sin (ʿāwōn) God does not think about.” God ignores it.
The idea is not that God himself has paid what one owes, as Anselm of Canterbury would formulate atonement soteriology for the West at the end of the eleventh century; Psalm 32:1–2 makes no mention of a price needing to be paid. Still, the opening verses explain forgiveness as having one’s sins covered (kĕsûy), with the parallel in 32:2 being that sins are ignored by God.
In his core text on justification, Paul quotes Ps. 32:1–2 in Rom. 4:7–8 to advance the position that uncircumcised gentile men may benefit from the forgiveness the psalm promises “apart from works [of the law],” that is, without having to undergo surgery or even symbolic circumcision. The move is to encourage gentiles to become children of Abraham whose righteousness is reckoned to them, just as “David” speaks of having received it and offered it to the whole people of God.
Certainly the point is central to Luther, who wrote on it voluminously. In his 1521 comment on Ps. 32 he writes, “Here David says, in plain words, that all the saints are, and still remain sinners; and that they are justified and sanctified in no other way than this;—God of his free mercy, for Christ’s sake, is pleased not to impute their sins unto them, nor to judge them, but, to forget them.” Calvin cites 32:1–2 (often together with Paul’s use of them in Rom. 4) numerous times in his Institutes, in support of the Protestant doctrine of justification.
It may be noteworthy that Theodore of Mopsuestia, a Greek-speaking contemporary of Augustine, presents a rather “Protestant” view of these verses a millennium before the Protestant Reformation. In Ps. 32, David “teaches everyone, even if they are righteous, that they ought not trust in the merit of their actions nor attribute to themselves any good work. Rather, whatever good work they perform they should ascribe to divine grace and confess that God’s mercy is necessary for them, and should believe themselves blessed if they deserve to have God well disposed toward them.”