Is God just and/or merciful?

I was raised in an Evangelical family, but my reply isn't necessarily restricted to this particular line of thought. I would say the biggest justification offered by apologists (say, my Mother and Father) for The Problem of Evil (also SEP) is that evil is needed for good to be recognized. Both philosophically (if everything is "good", then there would be no basis of comparison for non-good things, so everything would simply just "be"), and from a free-will perspective (humans need strife in order to cultivate those who are honorable (deserving to go to Heaven) from those who are not (who should go to hell).

So to specifically answer your question, the justification is that what God is doing is actually better for us in the long run; a little bad makes the good stand out, and it provides the grounds for free will.

For example:

John Polkinghorne is one advocate of the view that the current natural laws (having evil as a natural occurrence) are necessary for free will. See his book, Belief in God in an Age of Science (2003).

Richard Swinburne in "Is There a God?" writes that "the operation of natural laws producing evils gives humans knowledge (if they choose to seek it) of how to bring about such evils themselves."

Christian pastor and theologian, Gregory A. Boyd claims that God's all-powerful nature does not mean that God exercises all power, and instead allows free agents to act against his own wishes. He argues that since love must be chosen, love cannot exist without true free will. He also maintains that God does not plan or will evil in people's lives, but that evil is a result of a combination of free choices and the interconnectedness and complexity of life in a sinful and fallen world.

John Hick writes about "The 'Soul-Making Theodicy' in Evil and the God of Love how evil and suffering may be necessary for spiritual growth.

I could cite more, but the Wikipedia and SEP articles cover this pretty well, so you might consider just starting there.

God is both just and merciful.

As perfect creator of the world, God is uniquely qualified and has unique authority to judge the wicked. The enemies of Israel, the offenders of the prophets, the devotees of false gods, and an apostate Israel/Judah itself were the enemies either of God's people and by extension of God, or of God Himself. Since God is good, these therefore identified themselves with evil, and so for God (or His agent at His command; cf. also Rom 13:1–7) to punish them was just.

God is also merciful to whom He will be merciful (Rom 9:15). He is merciful to all, insofar as He bestows common grace upon all sinners. He is more merciful to some, whom He saves from the ultimate consequences of their sin. In this mercy, however, God is also completely just. Our sins our not simply wiped from the slate; they are rather accounted to Christ (2 Cor 5:21), who paid for them on the cross. No sin is left unpunished.

How a fully just God can impute my sin to a sinless individual and still be just, I confess I do not know. Am I not by rights the one who should have paid it? Nevertheless, I know it must be so. Shall not the judge of all the earth do right (Gen 18:25)? What shall we say then? Is there unrighteousness with God? God forbid (Rom 9:14).

As a footnote, do not forget the greatest historical demonstration of God's power: Jesus Christ. His incarnation, life, death and atonement, resurrection, and ascension are redemptive, not condemnatory.

See St. Thomas Aquinas's Summa Theologiæ I q. 21 a. 1:

Article 1. Whether there is justice in God?

Objection 1. It seems that there is not justice in God. For justice is divided against temperance. But temperance does not exist in God: neither therefore does justice.

Objection 2. Further, he who does whatsoever he wills and pleases does not work according to justice. But, as the Apostle says: "God worketh all things according to the counsel of His will" (Ephesians 1:11). Therefore justice cannot be attributed to Him.

Objection 3. Further, the act of justice is to pay what is due. But God is no man's debtor. Therefore justice does not belong to God.

Objection 4. Further, whatever is in God, is His essence. But justice cannot belong to this. For Boethius says (De Hebdom.): "Good regards the essence; justice the act." Therefore justice does not belong to God.

On the contrary, It is said (Psalm 10:8): "The Lord is just, and hath loved justice."

I answer that, There are two kinds of justice. The one consists in mutual giving and receiving, as in buying and selling, and other kinds of intercourse and exchange. This the Philosopher (Ethic. v, 4) calls commutative justice, that directs exchange and intercourse of business. This does not belong to God, since, as the Apostle says: "Who hath first given to Him, and recompense shall be made him?" (Romans 11:35). The other consists in distribution, and is called distributive justice; whereby a ruler or a steward gives to each what his rank deserves. As then the proper order displayed in ruling a family or any kind of multitude evinces justice of this kind in the ruler, so the order of the universe, which is seen both in effects of nature and in effects of will, shows forth the justice of God. Hence Dionysius says (Div. Nom. viii, 4): "We must needs see that God is truly just, in seeing how He gives to all existing things what is proper to the condition of each; and preserves the nature of each in the order and with the powers that properly belong to it."

Reply to Objection 1. Certain of the moral virtues are concerned with the passions, as temperance with concupiscence, fortitude with fear and daring, meekness with anger. Such virtues as these can only metaphorically be attributed to God; since, as stated above (Question 20, Article 1), in God there are no passions; nor a sensitive appetite, which is, as the Philosopher says (Ethic. iii, 10), the subject of those virtues. On the other hand, certain moral virtues are concerned with works of giving and expending; such as justice, liberality, and magnificence; and these reside not in the sensitive faculty, but in the will. Hence, there is nothing to prevent our attributing these virtues to God; although not in civil matters, but in such acts as are not unbecoming to Him. For, as the Philosopher says (Ethic. x, 8), it would be absurd to praise God for His political virtues.

Reply to Objection 2. Since good as perceived by intellect is the object of the will, it is impossible for God to will anything but what His wisdom approves. This is, as it were, His law of justice, in accordance with which His will is right and just. Hence, what He does according to His will He does justly: as we do justly what we do according to law. But whereas law comes to us from some higher power, God is a law unto Himself.

Reply to Objection 3. To each one is due what is his own. Now that which is directed to a man is said to be his own. Thus the master owns the servant, and not conversely, for that is free which is its own cause. In the word debt, therefore, is implied a certain exigence or necessity of the thing to which it is directed. Now a twofold order has to be considered in things: the one, whereby one created thing is directed to another, as the parts of the whole, accident to substance, and all things whatsoever to their end; the other, whereby all created things are ordered to God. Thus in the divine operations debt may be regarded in two ways, as due either to God, or to creatures, and in either way God pays what is due. It is due to God that there should be fulfilled in creatures what His will and wisdom require, and what manifests His goodness. In this respect, God's justice regards what befits Him; inasmuch as He renders to Himself what is due to Himself. It is also due to a created thing that it should possess what is ordered to it; thus it is due to man to have hands, and that other animals should serve him. Thus also God exercises justice, when He gives to each thing what is due to it by its nature and condition. This debt however is derived from the former; since what is due to each thing is due to it as ordered to it according to the divine wisdom. And although God in this way pays each thing its due, yet He Himself is not the debtor, since He is not directed to other things, but rather other things to Him. Justice, therefore, in God is sometimes spoken of as the fitting accompaniment of His goodness; sometimes as the reward of merit. Anselm touches on either view where he says (Prosolog. 10): "When Thou dost punish the wicked, it is just, since it agrees with their deserts; and when Thou dost spare the wicked, it is also just; since it befits Thy goodness."

Reply to Objection 4. Although justice regards act, this does not prevent its being the essence of God; since even that which is of the essence of a thing may be the principle of action. But good does not always regard act; since a thing is called good not merely with respect to act, but also as regards perfection in its essence. For this reason it is said (De Hebdom.) that the good is related to the just, as the general to the special.

And St. Thomas Aquinas's Summa Theologiæ I q. 21 a. 3, especially Objection/Reply #2:

Article 3. Whether mercy can be attributed to God?

Objection 1. It seems that mercy cannot be attributed to God. For mercy is a kind of sorrow, as Damascene says (De Fide Orth. ii, 14). But there is no sorrow in God; and therefore there is no mercy in Him.

Objection 2. Further, mercy is a relaxation of justice. But God cannot remit what appertains to His justice. For it is said (2 Timothy 2:13): "If we believe not, He continueth faithful: He cannot deny Himself." But He would deny Himself, as a gloss says, if He should deny His words. Therefore mercy is not becoming to God.

On the contrary, it is said (Psalm 110:4): "He is a merciful and gracious Lord."

I answer that, Mercy is especially to be attributed to God, as seen in its effect, but not as an affection of passion. In proof of which it must be considered that a person is said to be merciful [misericors], as being, so to speak, sorrowful at heart [miserum cor]; being affected with sorrow at the misery of another as though it were his own. Hence it follows that he endeavors to dispel the misery of this other, as if it were his; and this is the effect of mercy. To sorrow, therefore, over the misery of others belongs not to God; but it does most properly belong to Him to dispel that misery, whatever be the defect we call by that name. Now defects are not removed, except by the perfection of some kind of goodness; and the primary source of goodness is God, as shown above (Question 6, Article 4). It must, however, be considered that to bestow perfections appertains not only to the divine goodness, but also to His justice, liberality, and mercy; yet under different aspects. The communicating of perfections, absolutely considered, appertains to goodness, as shown above (6, 1, 4); in so far as perfections are given to things in proportion, the bestowal of them belongs to justice, as has been already said (1); in so far as God does not bestow them for His own use, but only on account of His goodness, it belongs to liberality; in so far as perfections given to things by God expel defects, it belongs to mercy.

Reply to Objection 1. This argument is based on mercy, regarded as an affection of passion.

Reply to Objection 2. God acts mercifully, not indeed by going against His justice, but by doing something more than justice; thus a man who pays another two hundred pieces of money, though owing him only one hundred, does nothing against justice, but acts liberally or mercifully. The case is the same with one who pardons an offence committed against him, for in remitting it he may be said to bestow a gift. Hence the Apostle calls remission a forgiving: "Forgive one another, as Christ has forgiven you" (Ephesians 4:32). Hence it is clear that mercy does not destroy justice, but in a sense is the fulness thereof. And thus it is said: "Mercy exalteth itself above judgment" (James 2:13).

A few points:

The "bunch of kids who made fun of Elijah's bald spot" were not a bunch of kids, (the KJV's translation is quite unfortunate here,) but a bunch of youths (meaning teens or young men.) It was Elisha, not Elijah, that they were making fun of, and laughing at him for being bald wasn't their offense. This incident took place soon after Elijah's ascension into heaven, and they were telling him to "go up, thou bald head." In other words, "hey baldie, if your master could go up to heaven, why can't you do it too?" Insinuating that God's chosen servant didn't have the power of God with him as his predecessor did was their sin, and it was a pretty serious sin indeed, because it can lead others around them away from the Lord.

Also, it says that there were over 40 youths involved in the incident. That's not "a bunch of kids," it's a small mob, and "mocking" in Old Testament times was not always confined to simple verbal taunting. They could very well have been putting the prophet in physical danger. One man, old enough to be going bald, against 40 strong young men isn't good odds, so why shouldn't he call upon the Lord for some help with his predicament?

As for the more general cases of "smiting the wicked," your "most superficial ethical level" is superficial indeed, as it only looks at the situation from a mortal perspective. To understand these actions, we need to look at it from an eternal perspective.

The scriptures make it clear that we will be judged according to our works, and that salvation comes by the Atonement of Jesus Christ, whose power we can apply to ourselves through faith and repentance. We have free will, to choose good or evil, for as long as that's a meaningful choice. But when a person or a civilization reaches the point where they've sunk so low that there are no good choices to make, and no faith or desire to repent in their hearts, then there's no point in keeping them around any longer, especially if doing so would harm others. (For example, by allowing them to live long enough to bring children into the world that would never end up having a chance to live righteously due to the environment they were raised in.) At that point, God destroys them to prevent greater harm to the world.

It's an act of love, done by an all-knowing God who understands the consequences, which makes it fundamentally different from a murder committed by a sociopath who doesn't know (or most likely even care) what his victims might have done had they continued to live.