The following answer, a slightly modified version of the one posted in 2002 at Philosophos (originally "Ask a Philosopher") and later on my own site since 2004, summarizes my approach to this vexing problem. Links to my other efforts may be found here.
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The question was: If there is God and he is almighty, why then do we suffer evil in the world?
I accept the factual assumption. We do suffer evil in this world. (Perhaps some philosophers would argue that evil is an illusion. But their allegedly veridical grasp of that illusion—which, arguably, would itself be an evil—makes me wonder if their perception of other evil is illusory.)
To the factual assumption is linked a moral presupposition, which we can explicate as follows. All things being equal, a moral agent who is able to prevent excessive suffering from befalling another—suffering from which good is neither expected to come nor can conceivably come—is morally obligated to prevent it if he can.
The strength of this obligation varies with circumstances. They include the risk to himself, his loved ones, or his property that the prospective preventive act may expose them to. (This does not hold for those who profession it is to incur risk in order to rescue others in danger.) Generally, however, as risk rises, obligation weakens. (We regard as heroes those who perform their rescue obligations without regard to risk, especially when risk is significant.) Obligation is strongest where ability is great and risk is minimal.
In the case of God—at least the deity of classical theism (that of Eastern and Western Christian orthodox theology)—ability is infinite and risk is zero.
And thus the implicit problem. For the existence of great power alone does not by itself make the occurrence of excessive suffering a puzzle. Many powerful men have made people suffer greatly, but their victims never wondered how it could be so. What would have made them wonder, and curse, was that anyone would praise their tormentors for being morally good. The questioner omitted to mention God’s moral character.
Neither did he specify what he means by “almighty” or even by “God.” We may ascribe to God great creative power without ascribing to him a monopoly of power, as does classical theism. In the latter philosophy, beings other than God do have power, but only by his leave. They have no power independently of God’s decreeing that they have it, which power God can withdraw at will.
There is an alternative theism, however, wherein God exercises the power of persuasion. God “lures” (Whitehead’s term) other subjects of experience into arrangements that afford more intense experiences for them and for God. God does that, according to this alternative scheme, by providing each subordinate agent with an initial aim, which the agent may accept or replace with its own. In such an alternative theism, God is not unilaterally responsible for the metaphysical situation in which each agent (including God) finds himself. Neither is God unilaterally responsible for the actual cosmic order that results from the decisions and actions of all agents. God is a necessary, but by no means a sufficient factor in the actual world order.
In the alternative theism, whose ultimate coherence and adequacy to experience we cannot assess here, evil results from the collision of subjective aims. Collision is perfectly compatible with the existence of a universal end-coordinating God. Without God, there would not be any coordination of aims. There would, therefore, be no intelligible world with someone in it asking how evil is possible. Given a world that God can shape but not unilaterally determine, God cannot obliterate evil any time God wishes to. The classical theistic God can. But classical theism cannot satisfactorily explain why God apparently wishes to so rarely and selectively, especially when the demand for God to do so is so excruciatingly urgent.
Given our moral presupposition, then, the God of classical theism cannot be morally good. Yet classical theism affirms God to be precisely that. Classical theism is therefore incoherent. The reasonable person rules out the incoherent. One theism’s incoherence, however, does not necessarily rule out every other version. The God of the alternative theism we have been entertaining, in so far as this God is the universal lure to the better, does all within God’s power to promote the realizable good in every situation. This God is therefore morally good. What God cannot do, however, is push gross matter around, as we can. Such pushing is, however, often what preventing excessive and pointless evil requires. God cannot be morally blamed for that inability.
If some kind of being recognizable as God is necessary for there to be a world, then the occurrence of excessive, pointless suffering does not disconfirm the existence of that God. On the supposition of the latter, however, we see how there can be “excessive,” “pointless” beauty.