This question touches many important issues. The American flag is a powerful symbol of this nation. It carries enormous emotional meaning, especially for veterans and for families that have sacrificed loved ones in wars and armed conflicts under that symbol. It can also carry great political significance for those who see it as a symbol of what they consider amiss with our nation. Anyone who doubts the power of the flag as a symbol might consider the public scandal caused in Chicago when a student artist at the internationally known Art Institute of Chicago chose to display the American flag on the floor of an art gallery. Public demonstrations followed the opening of the exhibit. The use and display of the flag remains a sensitive issue.
Some Christian churches are identified with nations or states (the Church of England is Anglican; the Church of Norway, Lutheran; the Church of Sweden, Lutheran; and so forth.). Sometimes these churches display flags as a part of their national identification. In the United States, of course, we have no state church. Yet here, too, many Christian congregations have traditionally included an American flag among the items used to furnish their worship space or displayed elsewhere in their building. In many congregations, it has been customary for the American flag to stand to one side of the altar and the so-called Christian flag to stand on the other. Perhaps when the Lutheran church was primarily an immigrant church, the need to display a clear loyalty to the new nation and not to the mother country was very important—especially when worship was in the mother tongue.
When considering what should appear in our worship space, Christians will always want to ask what symbols we can use to help us focus on what is central in our faith: Jesus Christ, our crucified and risen Lord. Of course, the cross or crucifix has become the preeminent symbol of Christ across many cultures and nations. There are other symbols that focus the community on Christ: the altar where the Holy Communion is celebrated; the baptismal font where Holy Baptism is celebrated; the pulpit or ambo where the Word is proclaimed in reading and preaching. Christian art that represents Christ and the teachings of the testaments in sculpture, stained glass, painting, and other artistic media are also powerful visible symbols. All of these are appropriate to the worship space because they help both individuals and the assembly focus on Christ. The focus of everything that appears in the worship space, not just flags, ought to be considered. Anything that does not direct us to Christ can easily become a distraction from Christ.
The flag of the United States is a national symbol, not a religious one. It is as at home in a ball park as in church. Christians balance their national loyalties with their loyalty to Jesus Christ and Christ’s church. The Christian church includes many individual nations and states. It calls Christians to transcend national divisions, and thus to observe their baptismal unity. As Saint Paul says: "For as many of you as were baptized into Christ have put on Christ. There is neither Jew nor Greek, there is neither slave nor free, there is neither male nor female; for you are all one in Christ Jesus" (Galatians 3:27-28). The worship space of the congregation is not the best place to display national flags, for such display honors neither the integrity of the flag nor the sovereignty of the Lordship of Christ. In reality, national interests and the commitment of the Christian to Christ can come into conflict.
A responsible alternative to putting the flag in the worship space would be to display it prominently place in other suitable places. Placing flags in the fellowship or community hall, the gymnasium, or other large meeting room used by civic groups such as scouting organizations or for civic functions such as voting, allows the flag to carry out its symbolic function for the nation without competing with the central symbols of the Christian faith. Congregations that have war memorial chapels, plaques, or books of remembrance and the like and which desire to display the American flag might want to consider placing the flag near those places in their building rather than in the worship space.
The so-called Christian flag seems originally to have been an emblem associated with the international Sunday school movement. It is not identified with any particular church body, is superfluous in a space where the cross or crucifix is the central symbol of the faith.
Whenever the American flag is displayed publicly, it is very important to follow with great care the rules of protocol that have been established by civic agencies governing that display. It is possible to give great-unintended offense if these rules are not followed. A local veterans group or military post usually can supply these rules on request. These protocols apply wherever the flag is displayed, indoors or outdoors. Proper placement, lighting, care, all need to be considered carefully.