Why does God allow bad things to happen?

Below is an excerpt of a bible study I attended.

Very old question. This topic has been discussed over the ages by the  young, the old, spiritual, non spiritual. If God is so good why does he allow bad things to happen? In December of 1991 I gave myself to the Lord but I still had atheist friends. With these friends I would go on a yearly ski trip vacation including the year I got saved. This particular year I was on fire for the Lord and these two guys, Greg and Daryl, were hard core atheists. Driving from Telluride Colorado to Crested Butte we got into a hard core discussion about God. Their one big argument was that if there was a God, they did not believe in one, he must be the most evil being in the universe because there is so much evil and poverty and disease in the world. A good God would not let that happen. A good God would not allow children to go hungry or die from disease. That was their thinking, not mine. So let me try to explain the providence God.
God’s providence means He wisely directs and permits all that happens in His creation. God involves Himself in all events and directs all things to accomplish His purpose. Health and sickness, riches and poverty come to us, not by chance, but from the Father’s love. So why does God allow bad things to happen? Why doesn’t God show me His purpose when my life is hard to understand?
All bad things, death, illness, injury, suffering, etc, can be traced back to the fall of Adam and Eve. This is when sin disrupted God’s perfect world. God limits suffering and restrains much evil. When God permits evil, He will use it for good, even though we might not see the good during our life time. Nothing happens by chance. The story of Joseph in the old testament is a prime example. He suffered terribly as a slave to Pharaoh. He could not imagine all that God was doing while he was in a bad way. But as the story continues Joseph rose out of that suffering by the grace of God and through that suffering many people were saved from starvation. Another real life example happened many years ago at work. Their was a very young pretty girl who worked with me at my place of employment. She died quick and suddenly without warning from a brain aneurysm. People were so distraought over her passing that many came to the Lord because of it.

People are not puppets. We make actual choices and are responsible for our actions. God does not override our will but He does direct circumstances to accomplish His will. God always acts for good. When people act in an evil way, they are guilty of doing wrong, even though God works through their actions to bring about good. God never deserves blame for peoples evil actions. He always deserves our praise.
We can trust God’s good purposes even when we do not understand what He is doing. Living by faith gives God’s children joy and brings Him glory. We must trust Him to show us all we need to know. Only God knows His infinite purposes for everything that happens. God leads His children by His Word and His spirit and other good gifts – our parents, natural abilities and good desires. We do not need to look to signs to know what to do. Knowing our heavenly Father is in control is more than enough for us.
Amen to that

By the way, the two atheists that I went on the ski trip with. One is dead from leukemia (he knows God is real now) and the other I have lost touch with.