The verbs lay and lie are total jerks. People often say lay when they mean lie, but it's wrong to lay around. You have to lay something, anything — lay an egg if you want. But you can lie around until the cows come home!
Lay is a transitive verb, meaning it needs to transport something (i.e. a direct object). When you lay the blanket down, "blanket" is the direct object. Chickens and bees often have eggs as direct objects. Here are two examples of lay in the present tense:
"The queen bee only has to mate once and will lay eggs for life." (Washington Times)
"Men, after all, relied mainly on pop culture for inspiration before; now, there lay an entire world of opportunity." (Time)
Lay is also the past tense of lie (to recline). That's not confusing at all! Today you lie on the bed. Yesterday, you lay on the itchy couch. Here's another lay in the past tense:
"For years the letter lay in a box in the attic." (New York Times)
Please lie down if that helps you understand. You lie down when you're tired, or you might tell a lie and say you're wide awake right before you lie down and fall asleep. The noun lie doesn't cause trouble, so here are examples of the other lie used correctly:
"During the day I come up here and lie in the shade." (BBC)
"A liquid ocean and a rocky core may lie beneath the icy shell." (New York Times)
The main thing to remember about lay and lie is that lay needs a direct object and lie doesn't. You have to lay something somewhere. After that, feel free to lie down. Lay is for chickens, and lie is for sleepy people.