One of the main difficulties in understanding the sacraments is understanding the relationship among these three elements of the sacraments. We’ll take baptism here for an example. The sign is the water, whether sprinkled, poured, or immersed (I believe that the amount of water used is ultimately immaterial). The thing signified is the cleansing blood of Christ. One important thing that is usually missed here is that the sacrament includes the thing signified. This gets at a huge problem in the church today. The church tends to refer to the sacrament as including only the sign. Therefore, when we use the term “baptism,” we usually mean just the sign, just the rite. However, this is not the only way to understand the sacrament. WLC 163 explicitly says that the “inward and spiritual grace thereby signified” is also part of the sacrament. This shouldn’t make us nervous in the least, because the real question is where the efficacy of baptism lies.
The power of baptism cannot lie in the sign. This is proven absolutely, 100% conclusively by Romans 4:11, which states explicitly that Abraham already had the thing signified long before he ever had the sign applied to him. Circumcision is described as a sign and seal. This refutes directly those who believe that the “seal” language implies conferral. For here in Romans 4:11 is a seal that most definitely could not confer something already possessed.
The thing signified obviously has saving power. The blood of Christ has an objectively saving power. But how does it get applied to us? The answer is in the sacramental union of sign and thing signified. Another way of describing this sacramental union is “Spirit-given faith.” This is how we avoid the problem that the Lutherans constantly have of ascribing saving power to baptism, and yet also saying “sola fide.” If it is Spirit-given faith that connects sign to thing signified, then that is faith alone that saves. Faith also connects the sign and the thing signified so that the whole sacrament is now present.
Note here that it is quite possible to possess the sign without the thing signified (as in the reprobate). It is also quite possible to possess the thing signified without the sign (as in Abraham before he was circumcised). The only way one can possess the whole sacrament is for the Holy Spirit to give us faith. I believe that it is only as we understand baptism this way that we can avoid the problem associated with too high a view of the sign (and the time-point of its administration), on the one hand; and a devaluing of the sacrament on the other, making the sacrament into a bare sign.
This fits in, I believe, with the Reformed emphasis of the sign as a confirmatory sign. When they use this language, they are talking about the sign by itself. But when they use language reacting against the Anabaptists (usually rejecting the position of a naked and bare sign), they are talking about the sign and the thing signified together. This is the normal way we use sacramental language, and we have to be careful to delineate whether we mean the sign considered just as a sign, or whether we are referring to the whole sacrament, including Spirit-given faith. I am convinced that massive amounts of miscommunication and confusion could be avoided if we are careful at just this point.