"I tell you the truth, before Abraham was born, I am!" (John 8:58)

Is Jesus saying he was born before Abraham was?

This statement by Jesus has been mistranslated* and misinterpreted by many teachers who confuse the spiritual self with the physical body.

This is Jesus' response to the Pharisees saying:
"You are not yet fifty years old and you have seen Abraham!" (John 8:57)
The key Greek words here are γίνομαι (ginomai) and εἰμί (eimi). According to the Greek lexicon, the applicable translation of γίνομαι is 'to arise, appear in history, come upon the stage; a) of men appearing in public.' 

So Jesus is referring to Abraham's appearance on the planet thousands of years before.

Furthermore, the Greek word εἰμί means 'to exist.' So Jesus is quite simply saying that he existed prior to even when Abraham walked the planet.

Taken out of context, it would appear that Jesus is making some reference about him being Abraham's superior. Like he is older than Abraham. This is not at all what Jesus is saying.

As he spoke to the priests above, Jesus was responding to the Pharisees' challenge that Jesus' body was only a few decades old, not trying to position himself as superior to Abraham. We know this because Jesus' previous sentence indicated that Abraham would be pleased with Jesus' teachings:
"Your father Abraham rejoiced at the thought of seeing my day..." (John 8:56)
The word "rejoiced" is translated from the Greek word ἀγαλλιάω (agalliaō), which means, according to the lexicon, "to be exceedingly glad." This means that Jesus is stating that Abraham would be pleased with Jesus' teachings.

Since Jesus first indicates that Abraham would be pleased, Jesus is not putting himself as Abraham's superior or predecessor. He is simply responding to the institutional temple priests identifying Jesus as his physical body: "You are not yet fifty years old."

Jesus is simply using the discussion of Abraham to illustrate that his existence is eternal.

Is Abraham still alive?

Yes, the spirit-person Abraham is still alive. He may no longer occupy that physical body he occupied centuries ago. But the spirit-person Abraham is still alive.

Abraham's identity is spiritual, just as our identity is spiritual. We are not these physical bodies. We are each spirit-persons who reside within this physical body. The fact that Jesus was not his physical body is illustrated by the fact that his spirit-person left his body at the time of death:
And when Jesus had cried out again in a loud voice, he gave up his spirit. (Matt. 27:50)
When he had received the drink, Jesus said, “It is finished.” With that, he bowed his head and gave up his spirit. (John 19:30)
Jesus called out with a loud voice, “Father, into your hands I commit my spirit.” When he had said this, he breathed his last. (Luke 23:46)
Thus we see that Jesus was not his physical body. He is the spirit-person who resided within a temporary physical body.

Furthermore, Jesus' statement discusses Abraham's physical appearance on the planet, not Abraham's spiritual existence. Therefore, there is nothing here to indicate that Abraham is also not eternal, also living in the spiritual world, as Jesus is indicating about himself. 

This was precisely what Jesus inferred in 8:56 as he indicated that Abraham sees what he is doing.

Do they not know our identity as spirit?

Those who are misinterpreting Jesus' statement here have the same misunderstanding regarding our spiritual identity as the temple priests had.

The reality is that we are not our physical bodies. This was a central tenet of Jesus' teachings, yet because so many Bible translators and preachers have been engrossed in the bodily perception, this has not been recognized. This is the very reason Jesus made the above statement.

Each of us is a spiritual individual inhabiting our physical body much like a car driver inhabits a car. Just as the car driver is not the car, we are not our physical body. We occupy this physical body only for a few decades before we are ripped away from the body at the time of death ("the last day").

So why do we wrongly identify ourselves as our physical body? This is part of God's design. We identify ourselves as the physical body as part of God's programming of the physical world. We are here to learn lessons, and to evolve as individuals. This learning requires us to be engrossed by the physical world.

Let's say that a child joins a baseball team. In the beginning, they teach the child the rules of the game. Soon the child begins to master the game and learns to play better. He cares about his team and teammates, and as a result, he develops certain relationships and goes through some learning experiences. He learns how to work hard and never quit. He learns to support his team by bunting sometimes or stealing a base. He learns teamwork.

Now learning these lessons would be impossible if the child's approach to the game was that the game and its rules were simply made up, and it was a stupid game with stupid rules. With this sort of attitude, the child would not take the game of baseball seriously. If he didn't take the game seriously, he wouldn't be able to learn all those lessons mentioned. Why? Because he didn't get engrossed in the game.

In the same way, the only way we can learn many of the lessons of the physical world is by becoming engrossed in our identities as physical. If we truly recognized that we were not physical, we would approach most things of this world as simply a waste of time.

Is this a central part of Jesus' teachings?

The question is whether understanding our spiritual identity was a major part of Jesus' teachings?
"Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear." (Matt. 6:25)
Why would Jesus teach that people should not worry about their physical body? Jesus is teaching them about their spiritual nature, and that they should now begin to focus their lives upon re-establishing their lost relationship with God.

What about learning the lessons of this world then? Those who seek God seek a higher level of learning within this world. They seek the lessons of the spiritual realm - the realm that the physical eyes cannot see. And the physical mind cannot comprehend.

Those who seek the spiritual truth have found that emptiness without God. They have learned that love is the only key to happiness.

Learning these lessons in effect 'graduate' one up to the state of being able to understand Jesus' teachings. This is illustrated by Jesus' trying to raise the consciousness of those he speaks to.

He is telling us the truth about our existence. He is telling us that we do not simply have a few decades of existence here in the physical world. We are eternal in essence, and if we decide to return to God, then we will reclaim our eternal lives:
"And everyone who has left houses or brothers or sisters or father or mother or children or fields for my sake will receive a hundred times as much and will inherit eternal life." (Matt. 29:19)
Here "for my sake" means they are following Jesus. To follow Jesus does not mean to simply proclaim we follow Jesus. To follow Jesus means that we learn his teachings, and apply them to our lives, including the fact that our focus should not be on the things of this world, but upon our relationship with God. This is obvious from Jesus' most important teaching:
“ ‘Love the Lord your God with all your heart and with all your soul and with all your mind.' This is the first and greatest commandment." (Matt. 22:37-38)

*Here is the translation of this statement according to the Lost Gospels of Jesus:

“Very truly I say to you, I existed before Abraham was born.” (John 8:58)