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Isaiah 12:1 is a mirror image of Paul’s writing in Romans 6:17. Compare the two passages.
Then you will say on that day, “I will give thanks to You, O LORD; For although You were angry with me, Your anger is turned away, And You comfort me.
Isaiah 12:1 NASB
But thanks be to God that though you were slaves of sin, you became obedient from the heart to that form of teaching to which you were committed
Romans 6:17 NASB
The idea is not to glorify our sinful state, nor to hide it. It is acknowledged in the context of God’s infinite mercy. Though we were slaves of sin, God made a way for us. The deliverance is two-fold. It is both from ourselves (our sinful nature) as well as our enemies of the natural and spiritual world.
This calls for a celebration! This chapter is a song of gratitude to the Lord. Let us rejoice for what He is has done! What should our response be? As verse 2 says, trust and do not be afraid. This is exactly what Isaiah was trying to get King Ahaz to do back in Chapter 7. Because we believe in the Salvation of God’s people, we will trust Him and fear nothing.