Why Does God Allow Suffering?

One of the questions often asked, sometimes as part of an attempt to disprove the existence of God is, "Why does God allow suffering?"  The argument usually runs along this line:  "If God is all loving and all powerful, how could he allow suffering to occur?  If He really did exist, then He would do away with suffering, but since there is suffering, He does not exist."

The problem with this argument is that is makes several assumptions that are faulty:  firstly that suffering is necessarily a bad thing; secondly that suffering serves no purpose and thirdly that there is no higher purpose than life on the Earth.

Types Of Suffering

It is quite clear that some of the suffering in the world is the result of sin or perhaps merely poor choices.  People exercise free will and choose to do things that cause pain, injury and unhappiness to themselves and others. Some suffering is not the result of the sufferer's sin, such as in the case of children. A great deal of the suffering in the world is as a result of us having mortal bodies. So there are a number of causes of pain and suffering.
If this life on Earth was all humans had to look forward to, then it might be said that God should not allow suffering.  There is, however, a life to come and our life on the Earth is a preparation for that life to come.  The trials we face now, have the ability to strengthen us. Our minds are to be focussed on the life that is to come (Colossians 3:1-2) and this world is perfect to equip us for it.
The example of JesusWe see in the case of Jesus himself that He suffered for our sakes.  His pain and suffering actually accomplished good for other people.
Hebrews 2:10
(10) For it was fitting for Him, for whom are all things and by whom are all things, in bringing many sons to glory, to make the captain of their salvation perfect through sufferings.
It was fitting for God to allow his own Son to suffer because there was a purpose to it.  The suffering of Jesus brought salvation to humankind. The aim of God is to bring people ‘to glory’, and Jesus died for this cause.
Just imagine...Imagine if God was to step in every time something bad was going to happen to a person.  The world would be a place of chaos.  Cause and effect would be an alien concept.  The man exercising his free will to shoot another person, would find that the bullets miraculously caused no harm. People would exercise their free will, but no negative consequence would happen, even if a person chose to do something terribly evil. God has, however, made a world where with the ability to choose our actions comes the consequences of those actions. God has made a world that obeys natural laws, without which the world would not be an orderly place. He is not a God of confusion (1 Corinthians 14:33).  God has put natural laws into effect as we see in the following quote:
Jeremiah 33:25
(25) “Thus says the LORD: ‘If My covenant is not with day and night, and if I have not appointed the ordinances of heaven and earth...,
(also see Jeremiah 31:35-36)
Pain and suffering serve a purpose
If there were no consequences for sin on this earth, there would be no motivation to seek after God and at the point of death, a person would go to their eternal fate, whether that be eternal punishment, or eternal life (John 5:29).  The lives of both groups would have been no different from each other in the sense that neither would have faced or seen any suffering.  The person living a lifestyle which was spiritually harmful, would have no physical indications that sin was damaging, nor would they be caused to reflect upon the temporary nature their existence.  We can see how pain is a useful thing when we consider this analogy:
A person who can feel pain puts their hand into near boiling water and pulls it out because of the pain.  Another person, who feels no pain puts his hand into the water and keeps it there, unaware his hand is becoming increasingly damaged.  
Pain, we can see, in this case is helpful: it alerts us to a danger.  This is also true in the spiritual realm.  Human suffering, both our own and of those around us, reminds us of the fact that we are mortal and has the ability to provoke us to prepare ourselves for the life to come.
There really would be no motivation to seek a life beyond that which is on the Earth. Pain and suffering are, however, valuable as motivators. They help us to remember that we are mortal and provoke us to think about a life beyond this one.
Psalm 119:67-71
(68) Before I was afflicted I went astray, but now I keep Your word. 68 You are good, and do good; Teach me Your statutes. (69) The proud have forged a lie against me, but I will keep Your precepts with my whole heart. (70) Their heart is as fat as grease, but I delight in Your law. (71) It is good for me that I have been afflicted, that I may learn Your statutes.
There is more than just this life
In all of the sufferings and hardships we might witness or experience we need to remember that we are mortal (perishing) and that this earth is only a preparation for the life to come.
II Corinthians 4:16-18
(16) Therefore we do not lose heart. Even though our outward man is perishing, yet the inward man is being renewed day by day. (17) For our light affliction, which is but for a moment, is working for us a far more exceeding and eternal weight of glory, (18) while we do not look at the things which are seen, but at the things which are not seen. For the things which are seen are temporary, but the things which are not seen are eternal.
Jesus told us to seek treasures in heaven:
Matthew 16:19-20
(19) “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; (20) but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.
We have a parable about a man who did not follow the advice seen in the previous quote.  In the parable we are left with the distinct impression that the man mentioned had a fairly 'easy life' and it was his self-satisfaction that caused him to neglect his service to God.
Luke 12:16-21
(16) Then He spoke a parable to them, saying: “The ground of a certain rich man yielded plentifully. (17) And he thought within himself, saying, ‘What shall I do, since I have no room to store my crops?’ (18) So he said, ‘I will do this: I will pull down my barns and build greater, and there I will store all my crops and my goods. (19) And I will say to my soul, “Soul, you have many goods laid up for many years; take your ease; eat, drink, and be merry.” ’ (20) But God said to him, ‘Fool! This night your soul will be required of you; then whose will those things be which you have provided?’
(21) “So is he who lays up treasure for himself, and is not rich toward God.”
All things work together for goodIn Romans, Paul gives us the assurance that in all things we cannot be separated from God's love if we love the Lord.  This does not mean we will not suffer in our lives, but rather, that this suffering cannot take us away from God, unless we let it.
Romans 8:28,35-39
(28) And we know that all things work together for good to those who love God, to those who are the called according to His purpose...
(35) Who shall separate us from the love of Christ? Shall tribulation, or distress, or persecution, or famine, or nakedness, or peril, or sword? (36) As it is written: “For Your sake we are killed all day long; we are accounted as sheep for the slaughter.” (37) Yet in all these things we are more than conquerors through Him who loved us. (38) For I am persuaded that neither death nor life, nor angels nor principalities nor powers, nor things present nor things to come, (39) nor height nor depth, nor any other created thing, shall be able to separate us from the love of God which is in Christ Jesus our Lord.
ConclusionThe argument that God cannot exist because if He did there would be no pain and suffering, is a faulty argument, which does not take into account the free will of people, the mortal nature of humans, the need for natural laws (including the concept of cause and effect) and the life to come.
God has provided us with a world in which we can develop our ‘inner man’ (II Corinthians 4:16).  As we saw in Hebrews 2:10, God desires to bring people to glory and he has made a world which is perfect to enable this to happen.
James sums up by showing that trials in this life are to strengthen us.
James 1:2-4
(2) My brethren, count it all joy when you fall into various trials, (3) knowing that the testing of your faith produces patience. (4) But let patience have its perfect work, that you may be perfect and complete, lacking nothing.