I have heard this statement and have read it in the Bible. I just wanted to state what I think this means.
Where would evil have come from? What makes evil? Evil is such because God Himself has labeled it as such. If He hadn't given us His rules and told us what evil was--we would have had no idea that we are evil or sinful.
I believe that God watched all of His creations through all of time and the things that caused extinction and/or mass destruction within a species is what He called evil/sin. He told us the rules to allow us to overcome these things, so that mankind could live long upon the earth. We are failing at this. God needs nothing from us and could recreate at will. He loves us and wants us to overcome and spend eternity with Him. Love gets this done.
God did not make things evil. He made beings that decided to become disobedient to Him (evil/sinful)--do things that lead to the destruction of ourselves and also a part of Him.
When God said He created evil He was just accepting responsibility for His own actions by creating us. He did no evil and remains pure.
Hmm, I'm not sure a claim in court that you had invented evil but never personally indulged in it would go very far with the judge. Not that God would be held to our standards, but. Personally I agree with you, but I'm a bit more comfortable with "I created evil, but it came with the appropriate warning."
Standing next to an angel of God will be strangely trippy because you are suddenly aware that absolutely anything could happen (um, and I would encourage some personal cultivation here), and evil plays a part in this that can be hard to grasp.
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